INTUIT ACADEMY TAX LEVEL 1 EXAM – QUESTIONS AND ANSWERS | VERIFIED AND WELL DETAILED ANSWERS |
PLUS RATIONALES | GUARANTEED PASS | LATEST EXAM UPDATE
Core Domains
Tax Fundamentals: Filing Status, Dependents, Gross Income, and Standard Deduction.
Income Reporting: W-2, 1099 Series, Interest, Dividends, and Retirement Distributions.
Deductions and Credits: Itemized vs. Standard Deductions, Adjustments to Income, and Common Credits.
Self-Employment and Business Income: Schedule C, Self-Employment Tax, and Business Expenses.
Filing and Compliance: Filing Requirements, Extensions, and Taxpayer Documentation.
Ethics and Professional Conduct: Preparer Responsibilities, Confidentiality, and Due Diligence.
Practical Application: Scenario-Based Questions on Tax Preparation and Professional Decision-Making.
Introduction
This comprehensive assessment is designed to prepare candidates for the Intuit Academy Tax Level 1 exam, a
foundational certification for individuals seeking to demonstrate their knowledge of U.S. federal individual income tax
preparation. The exam evaluates a candidate's ability to apply core tax concepts, accurately report various types of
income, determine appropriate deductions and credits, and navigate common filing scenarios. It features a mix of
multiple-choice and scenario-based questions to test both recall and practical application. Mastering these concepts is
crucial for professional decision-making and ensuring compliance with IRS regulations, forming the bedrock of a career
in tax preparation. This guide is intended to be a definitive resource for exam success.
Question 1
What is the standard deduction for a single filer?
A. $12,950
B. $13,850
C. $14,050
,D. $16,100
🟢 Correct Answer: C. $14,050
🔴 Explanation: The standard deduction for a single filer is correctly identified as $14,050. This figure is a benchmark
for foundational tax knowledge and is updated periodically for inflation .
Question 2
Which form is used to report wages, salaries, and tips paid to an employee, along with taxes withheld?
A. Form 1099-INT
B. Form W-4
C. Form W-2
D. Form 1040
🟢 Correct Answer: C. Form W-2
🔴 Explanation: Form W-2 is the official tax document employers must provide to employees and the IRS, detailing
annual compensation and the taxes withheld from their paychecks .
Question 3
A taxpayer is unmarried, paid more than half the cost of keeping up a home for the year, and has a qualifying child
living with them for more than half the year. What is their most beneficial filing status?
A. Single
B. Married Filing Separately
C. Head of Household
D. Qualifying Surviving Spouse
🟢 Correct Answer: C. Head of Household
🔴 Explanation: The Head of Household filing status is designed for unmarried individuals who provide a home for a
qualifying dependent, offering more favorable tax brackets and a higher standard deduction than the Single status .
Question 4
Which of the following is a refundable tax credit?
,A. Child Tax Credit (for the full amount)
B. Earned Income Tax Credit (EITC)
C. Lifetime Learning Credit
D. Saver's Credit
🟢 Correct Answer: B. Earned Income Tax Credit (EITC)
🔴 Explanation: The Earned Income Tax Credit is a refundable credit, meaning it can generate a refund even if the
taxpayer has no tax liability. Other credits like the Child Tax Credit may be partially refundable, but the EITC is the
most prominent fully refundable credit for lower-income working individuals and families .
Question 5
A taxpayer receives a Form 1099-R with a Code "Q" in Box 7. This indicates:
A. The distribution is taxable.
B. The distribution is a qualified rollover.
C. The distribution is a qualified distribution from a Roth IRA.
D. The distribution is subject to an early withdrawal penalty.
🟢 Correct Answer: C. The distribution is a qualified distribution from a Roth IRA.
🔴 Explanation: Code Q on Form 1099-R specifically designates a "Qualified distribution from a Roth IRA." This is
crucial as it signifies the distribution is generally tax-free and penalty-free, provided certain conditions are met .
Question 6
A single taxpayer under 65 has a gross income of $10,000 in 2026. Are they required to file a federal tax return?
A. Yes, all income must be reported.
B. No, because their income is below the filing threshold.
C. Only if they received a W-2 form.
D. Yes, but only if they are not claimed as a dependent.
🟢 Correct Answer: B. No, because their income is below the filing threshold.
🔴 Explanation: A taxpayer is not required to file a return if their gross income is below the IRS-established filing
, threshold, which for a single filer is higher than this amount. However, they may still choose to file to claim a refund
of withheld taxes .
Question 7
Which of the following is an "above-the-line" deduction?
A. Mortgage interest deduction
B. Charitable contribution deduction
C. State and local tax deduction
D. Deduction for student loan interest
🟢 Correct Answer: D. Deduction for student loan interest
🔴 Explanation: The deduction for student loan interest is an adjustment to income, also known as an "above-the-
line" deduction. It is subtracted from gross income to arrive at Adjusted Gross Income (AGI), and is available even if
the taxpayer does not itemize deductions .
Question 8
To meet the "Qualifying Child" test for a dependent, the child must generally be all of the following except:
A. Be the taxpayer's child, stepchild, or foster child.
B. Be under age 19 or a full-time student under age 24.
C. Have a gross income of less than $4,700.
D. Live with the taxpayer for more than half the year.
🟢 Correct Answer: C. Have a gross income of less than $4,700.
🔴 Explanation: The gross income test is a condition for a "Qualifying Relative," not a "Qualifying Child." A qualifying
child must meet the relationship, age, residency, and support tests, but there is no gross income requirement for the
child .
Question 9
A taxpayer uses a portion of their home exclusively and regularly for business. What form do they use to report this
business income and expenses?
PLUS RATIONALES | GUARANTEED PASS | LATEST EXAM UPDATE
Core Domains
Tax Fundamentals: Filing Status, Dependents, Gross Income, and Standard Deduction.
Income Reporting: W-2, 1099 Series, Interest, Dividends, and Retirement Distributions.
Deductions and Credits: Itemized vs. Standard Deductions, Adjustments to Income, and Common Credits.
Self-Employment and Business Income: Schedule C, Self-Employment Tax, and Business Expenses.
Filing and Compliance: Filing Requirements, Extensions, and Taxpayer Documentation.
Ethics and Professional Conduct: Preparer Responsibilities, Confidentiality, and Due Diligence.
Practical Application: Scenario-Based Questions on Tax Preparation and Professional Decision-Making.
Introduction
This comprehensive assessment is designed to prepare candidates for the Intuit Academy Tax Level 1 exam, a
foundational certification for individuals seeking to demonstrate their knowledge of U.S. federal individual income tax
preparation. The exam evaluates a candidate's ability to apply core tax concepts, accurately report various types of
income, determine appropriate deductions and credits, and navigate common filing scenarios. It features a mix of
multiple-choice and scenario-based questions to test both recall and practical application. Mastering these concepts is
crucial for professional decision-making and ensuring compliance with IRS regulations, forming the bedrock of a career
in tax preparation. This guide is intended to be a definitive resource for exam success.
Question 1
What is the standard deduction for a single filer?
A. $12,950
B. $13,850
C. $14,050
,D. $16,100
🟢 Correct Answer: C. $14,050
🔴 Explanation: The standard deduction for a single filer is correctly identified as $14,050. This figure is a benchmark
for foundational tax knowledge and is updated periodically for inflation .
Question 2
Which form is used to report wages, salaries, and tips paid to an employee, along with taxes withheld?
A. Form 1099-INT
B. Form W-4
C. Form W-2
D. Form 1040
🟢 Correct Answer: C. Form W-2
🔴 Explanation: Form W-2 is the official tax document employers must provide to employees and the IRS, detailing
annual compensation and the taxes withheld from their paychecks .
Question 3
A taxpayer is unmarried, paid more than half the cost of keeping up a home for the year, and has a qualifying child
living with them for more than half the year. What is their most beneficial filing status?
A. Single
B. Married Filing Separately
C. Head of Household
D. Qualifying Surviving Spouse
🟢 Correct Answer: C. Head of Household
🔴 Explanation: The Head of Household filing status is designed for unmarried individuals who provide a home for a
qualifying dependent, offering more favorable tax brackets and a higher standard deduction than the Single status .
Question 4
Which of the following is a refundable tax credit?
,A. Child Tax Credit (for the full amount)
B. Earned Income Tax Credit (EITC)
C. Lifetime Learning Credit
D. Saver's Credit
🟢 Correct Answer: B. Earned Income Tax Credit (EITC)
🔴 Explanation: The Earned Income Tax Credit is a refundable credit, meaning it can generate a refund even if the
taxpayer has no tax liability. Other credits like the Child Tax Credit may be partially refundable, but the EITC is the
most prominent fully refundable credit for lower-income working individuals and families .
Question 5
A taxpayer receives a Form 1099-R with a Code "Q" in Box 7. This indicates:
A. The distribution is taxable.
B. The distribution is a qualified rollover.
C. The distribution is a qualified distribution from a Roth IRA.
D. The distribution is subject to an early withdrawal penalty.
🟢 Correct Answer: C. The distribution is a qualified distribution from a Roth IRA.
🔴 Explanation: Code Q on Form 1099-R specifically designates a "Qualified distribution from a Roth IRA." This is
crucial as it signifies the distribution is generally tax-free and penalty-free, provided certain conditions are met .
Question 6
A single taxpayer under 65 has a gross income of $10,000 in 2026. Are they required to file a federal tax return?
A. Yes, all income must be reported.
B. No, because their income is below the filing threshold.
C. Only if they received a W-2 form.
D. Yes, but only if they are not claimed as a dependent.
🟢 Correct Answer: B. No, because their income is below the filing threshold.
🔴 Explanation: A taxpayer is not required to file a return if their gross income is below the IRS-established filing
, threshold, which for a single filer is higher than this amount. However, they may still choose to file to claim a refund
of withheld taxes .
Question 7
Which of the following is an "above-the-line" deduction?
A. Mortgage interest deduction
B. Charitable contribution deduction
C. State and local tax deduction
D. Deduction for student loan interest
🟢 Correct Answer: D. Deduction for student loan interest
🔴 Explanation: The deduction for student loan interest is an adjustment to income, also known as an "above-the-
line" deduction. It is subtracted from gross income to arrive at Adjusted Gross Income (AGI), and is available even if
the taxpayer does not itemize deductions .
Question 8
To meet the "Qualifying Child" test for a dependent, the child must generally be all of the following except:
A. Be the taxpayer's child, stepchild, or foster child.
B. Be under age 19 or a full-time student under age 24.
C. Have a gross income of less than $4,700.
D. Live with the taxpayer for more than half the year.
🟢 Correct Answer: C. Have a gross income of less than $4,700.
🔴 Explanation: The gross income test is a condition for a "Qualifying Relative," not a "Qualifying Child." A qualifying
child must meet the relationship, age, residency, and support tests, but there is no gross income requirement for the
child .
Question 9
A taxpayer uses a portion of their home exclusively and regularly for business. What form do they use to report this
business income and expenses?
