Intuit Academy Tax Level 1 Practice Exam (2026)-Complete
Questions, Verified Answers & Detailed Explanations | Updated
2026/2027.
Question 1
A taxpayer received wages reported on Form W-2. Where are these wages
generally reported on the federal individual income tax return?
A. Schedule C
B. Form 1040
C. Schedule E
D. Form 8949
Correct Answer: B. Form 1040
Explanation: Wages reported on Form W-2 are entered on Form 1040 and
are included in the taxpayer's gross income. Form 1040 is the primary federal
income tax return for individuals.
Question 2
Which filing status is generally available to an unmarried taxpayer who pays
more than half the cost of maintaining a home for a qualifying dependent?
A. Married Filing Jointly
B. Head of Household
C. Married Filing Separately
D. Qualifying Surviving Spouse
Correct Answer: B. Head of Household
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,Explanation: Head of Household status may provide favorable tax rates and a
higher standard deduction for qualifying unmarried taxpayers who meet
specific requirements.
Question 3
Which document reports wages earned and federal income tax withheld by an
employer?
A. Form 1099-INT
B. Form W-2
C. Schedule K-1
D. Form 1098
Correct Answer: B. Form W-2
Explanation: Employers issue Form W-2 annually to report employee wages
and taxes withheld.
Question 4
Which of the following is generally considered taxable income?
A. Salary earned from employment
B. Qualified life insurance death benefits
C. Gifts received from family members
D. Most inheritances
Correct Answer: A. Salary earned from employment
Explanation: Wages and salaries are generally taxable income and must be
reported on the taxpayer's federal return.
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,Question 5
Adjusted Gross Income (AGI) is calculated after:
A. Adding refundable credits.
B. Subtracting certain adjustments from total income.
C. Deducting federal withholding.
D. Applying tax credits.
Correct Answer: B. Subtracting certain adjustments from total income.
Explanation: AGI equals total income minus eligible above-the-line
adjustments and is used to determine eligibility for many tax benefits.
Question 6
What is the primary purpose of the standard deduction?
A. Increase taxable income.
B. Reduce taxable income.
C. Calculate payroll taxes.
D. Determine filing status.
Correct Answer: B. Reduce taxable income.
Explanation: The standard deduction lowers taxable income for eligible
taxpayers who do not itemize deductions.
Question 7
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, Which tax benefit directly reduces the amount of tax owed?
A. Tax credit
B. Tax deduction
C. Filing extension
D. Exemption
Correct Answer: A. Tax credit
Explanation: Tax credits reduce tax liability dollar for dollar, while
deductions reduce taxable income.
Question 8
Which form is commonly used to report interest income?
A. Form W-2
B. Form 1099-INT
C. Form W-4
D. Form 1095-A
Correct Answer: B. Form 1099-INT
Explanation: Financial institutions issue Form 1099-INT to report taxable
interest income.
Question 9
Who is primarily responsible for providing accurate information on a federal
tax return?
A. The IRS
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Questions, Verified Answers & Detailed Explanations | Updated
2026/2027.
Question 1
A taxpayer received wages reported on Form W-2. Where are these wages
generally reported on the federal individual income tax return?
A. Schedule C
B. Form 1040
C. Schedule E
D. Form 8949
Correct Answer: B. Form 1040
Explanation: Wages reported on Form W-2 are entered on Form 1040 and
are included in the taxpayer's gross income. Form 1040 is the primary federal
income tax return for individuals.
Question 2
Which filing status is generally available to an unmarried taxpayer who pays
more than half the cost of maintaining a home for a qualifying dependent?
A. Married Filing Jointly
B. Head of Household
C. Married Filing Separately
D. Qualifying Surviving Spouse
Correct Answer: B. Head of Household
1|Page
,Explanation: Head of Household status may provide favorable tax rates and a
higher standard deduction for qualifying unmarried taxpayers who meet
specific requirements.
Question 3
Which document reports wages earned and federal income tax withheld by an
employer?
A. Form 1099-INT
B. Form W-2
C. Schedule K-1
D. Form 1098
Correct Answer: B. Form W-2
Explanation: Employers issue Form W-2 annually to report employee wages
and taxes withheld.
Question 4
Which of the following is generally considered taxable income?
A. Salary earned from employment
B. Qualified life insurance death benefits
C. Gifts received from family members
D. Most inheritances
Correct Answer: A. Salary earned from employment
Explanation: Wages and salaries are generally taxable income and must be
reported on the taxpayer's federal return.
2|Page
,Question 5
Adjusted Gross Income (AGI) is calculated after:
A. Adding refundable credits.
B. Subtracting certain adjustments from total income.
C. Deducting federal withholding.
D. Applying tax credits.
Correct Answer: B. Subtracting certain adjustments from total income.
Explanation: AGI equals total income minus eligible above-the-line
adjustments and is used to determine eligibility for many tax benefits.
Question 6
What is the primary purpose of the standard deduction?
A. Increase taxable income.
B. Reduce taxable income.
C. Calculate payroll taxes.
D. Determine filing status.
Correct Answer: B. Reduce taxable income.
Explanation: The standard deduction lowers taxable income for eligible
taxpayers who do not itemize deductions.
Question 7
3|Page
, Which tax benefit directly reduces the amount of tax owed?
A. Tax credit
B. Tax deduction
C. Filing extension
D. Exemption
Correct Answer: A. Tax credit
Explanation: Tax credits reduce tax liability dollar for dollar, while
deductions reduce taxable income.
Question 8
Which form is commonly used to report interest income?
A. Form W-2
B. Form 1099-INT
C. Form W-4
D. Form 1095-A
Correct Answer: B. Form 1099-INT
Explanation: Financial institutions issue Form 1099-INT to report taxable
interest income.
Question 9
Who is primarily responsible for providing accurate information on a federal
tax return?
A. The IRS
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