INTUIT ACADEMY TAX LEVEL 1 ACTUAL EXAM TEST PAPER FULL QUESTIONS CORRECT
RESPONSES
● Civil War Income Tax. Answer: Temporary income tax introduced during the 1860s.
● Tax Repeal. Answer: The income tax was repealed in 1872.
● Unconstitutional Income Tax. Answer: Individual income tax enacted in the 1890s
(1894-1895) but held unconstitutional.
● 16th Amendment. Answer: Ratified in 1913, establishing the federal income tax.
● 1913 Tax Rates. Answer: 1% on income over $3,000 and 7% on income over $500,000.
● Direct Taxes. Answer: Considered direct taxes prior to the 16th Amendment, required to be
apportioned among states based on population.
● Internal Revenue Code (IRC). Answer: A primary source of tax law.
● Judicial Interpretation. Answer: Court decisions that interpret tax law.
● Statutes Enacted by Congress. Answer: Laws passed by Congress that serve as a primary
source of tax law.
● Newsletters from Law Firms. Answer: Secondary sources of tax law.
● Purpose of Taxes. Answer: To provide revenue for government operations, influence
behavior, promote certain activities, and discourage certain activities.
● Components of a Tax. Answer: A required payment to a governmental entity with no direct
benefit received in exchange.
● Tax Calculation Formula. Answer: Base × Rate.
● Types of Bases for Tax Calculation. Answer: Income, Transaction/Purchase, Property
Value.
● Average Tax Rate. Answer: Total Tax ÷ Taxable Income.
● Effective Tax Rate. Answer: Total Tax ÷ Total Income (includes tax-exempt amounts).
, ● Marginal Tax Rate. Answer: Tax rate applied to the next dollar of income.
● Ordinary Tax Brackets. Answer: 7 brackets ranging from 10% to 37%.
● Preferential Tax Rates. Answer: Rates for Long-Term Capital Gains (LTCG) & Qualified
Dividends: 0%, 15%, 20%.
● Tax Rate Structures. Answer: Proportional, Progressive, and Regressive.
● FICA Taxes (2025). Answer: Total of 7.65%, with Social Security at 6.3% (Cap = $176,100)
and Medicare at 1.45%.
● Types of Federal Taxes. Answer: Individual Income Tax - 54%, FICA Taxes - 33%,
Corporate Income Tax - 11%, Excise Tax - 1%, Estate & Gift Tax - 1%.
● Types of State Taxes. Answer: Sales Tax - 50%, Income Tax - 40%, Excise Tax -
remainder.
● Municipal Taxes. Answer: Includes Property Tax on real and personal property.
● Criteria for Evaluating a Tax System. Answer: Includes Sufficiency, Equity, Certainty,
Convenience, and Economy.
● Gross Income. Answer: Everything is included unless specifically excluded or deferred by
the tax code.
● Standard Deduction (2025). Answer: MFJ: $31,500; Single: $15,750; Head of Household
(HoH): $23,625.
● Additional Standard Deduction (Age 65+/Blind). Answer: Single/HoH: +$2,000; MFJ:
+$1,600.
● Individual Tax Return Due. Answer: April 15 (unless holiday/weekend).
● Extension. Answer: 6 months.
● Statute of Limitations. Answer: General Rule: 3 years from the later of original due date or
date return was filed.
● Substantial understatement of gross income. Answer: 6 Years: Substantial understatement
of gross income (>25%).
● Unlimited Statute of Limitations. Answer: No return filed or fraudulent return.
RESPONSES
● Civil War Income Tax. Answer: Temporary income tax introduced during the 1860s.
● Tax Repeal. Answer: The income tax was repealed in 1872.
● Unconstitutional Income Tax. Answer: Individual income tax enacted in the 1890s
(1894-1895) but held unconstitutional.
● 16th Amendment. Answer: Ratified in 1913, establishing the federal income tax.
● 1913 Tax Rates. Answer: 1% on income over $3,000 and 7% on income over $500,000.
● Direct Taxes. Answer: Considered direct taxes prior to the 16th Amendment, required to be
apportioned among states based on population.
● Internal Revenue Code (IRC). Answer: A primary source of tax law.
● Judicial Interpretation. Answer: Court decisions that interpret tax law.
● Statutes Enacted by Congress. Answer: Laws passed by Congress that serve as a primary
source of tax law.
● Newsletters from Law Firms. Answer: Secondary sources of tax law.
● Purpose of Taxes. Answer: To provide revenue for government operations, influence
behavior, promote certain activities, and discourage certain activities.
● Components of a Tax. Answer: A required payment to a governmental entity with no direct
benefit received in exchange.
● Tax Calculation Formula. Answer: Base × Rate.
● Types of Bases for Tax Calculation. Answer: Income, Transaction/Purchase, Property
Value.
● Average Tax Rate. Answer: Total Tax ÷ Taxable Income.
● Effective Tax Rate. Answer: Total Tax ÷ Total Income (includes tax-exempt amounts).
, ● Marginal Tax Rate. Answer: Tax rate applied to the next dollar of income.
● Ordinary Tax Brackets. Answer: 7 brackets ranging from 10% to 37%.
● Preferential Tax Rates. Answer: Rates for Long-Term Capital Gains (LTCG) & Qualified
Dividends: 0%, 15%, 20%.
● Tax Rate Structures. Answer: Proportional, Progressive, and Regressive.
● FICA Taxes (2025). Answer: Total of 7.65%, with Social Security at 6.3% (Cap = $176,100)
and Medicare at 1.45%.
● Types of Federal Taxes. Answer: Individual Income Tax - 54%, FICA Taxes - 33%,
Corporate Income Tax - 11%, Excise Tax - 1%, Estate & Gift Tax - 1%.
● Types of State Taxes. Answer: Sales Tax - 50%, Income Tax - 40%, Excise Tax -
remainder.
● Municipal Taxes. Answer: Includes Property Tax on real and personal property.
● Criteria for Evaluating a Tax System. Answer: Includes Sufficiency, Equity, Certainty,
Convenience, and Economy.
● Gross Income. Answer: Everything is included unless specifically excluded or deferred by
the tax code.
● Standard Deduction (2025). Answer: MFJ: $31,500; Single: $15,750; Head of Household
(HoH): $23,625.
● Additional Standard Deduction (Age 65+/Blind). Answer: Single/HoH: +$2,000; MFJ:
+$1,600.
● Individual Tax Return Due. Answer: April 15 (unless holiday/weekend).
● Extension. Answer: 6 months.
● Statute of Limitations. Answer: General Rule: 3 years from the later of original due date or
date return was filed.
● Substantial understatement of gross income. Answer: 6 Years: Substantial understatement
of gross income (>25%).
● Unlimited Statute of Limitations. Answer: No return filed or fraudulent return.
