INTUIT ACADEMY TAX LEVEL 1
QUESTIONS & ANSWERS
Below the line deductions include - ANSWERStandard deduction
Eligible educators can deduct up to _______ of qualified expenses paid during the tax
year. - ANSWER$250
Which of the following is an ineligible medical expense for HSA, Archer MSA, and MA
MSA? - ANSWERBreast enhancement
The net capital gain is taxed at _______ if the married filing jointly taxpayer income is
less than $80,800. - ANSWER0%
To claim a child as a dependent, they must meet the qualifying child test or
________________. - ANSWERqualifying relative test
Ordinary dividends are taxed at the same rate as __________ income tax rate. -
ANSWERordinary
Distributions from HSA, Archer MSA, or MS MSA are non-taxable when
_________________________________________. - ANSWERspent for qualified
medical expenses of your dependent
Which residency status is used when an individual is neither a U.S. citizen nor a
resident alien for tax purposes? - ANSWERNon-resident alien
_____________ and ____________ are what taxpayers must know to calculate their
tax amount. - ANSWERTaxable income and filing status
For mortgages entered into after December 15, 2017, the amount of interest the
taxpayer can deduct is no more than ______________ of the debt used to buy, build, or
substantially improve their principal home and a second home. - ANSWER750,000
__________ reduce the amount of tax due. - ANSWERTax credits
Which form is for beneficiaries who get income from trusts and estates? -
ANSWERForm 1041
___________________ consists of both earned and unearned income that is used to
calculate the tax. It is generally less than adjusted gross income due to the deductions. -
ANSWERTaxable income
,To satisfy the Substantial Presence Test, how many minimum days (in the current year)
must you be physically present in the United States? - ANSWER31
Complete the equation. ___________ = Selling Price - Purchase Price -
ANSWERCapital Loss or Capital Gain
_________________ helps sole proprietorships calculate the profit or loss from a
business while also providing the IRS with your total business income and deductions. -
ANSWERSchedule C
What type of deduction is a HSA contribution? - ANSWERAbove-the-Line Deduction
Some of the common expenses on which Above-the-Line deductions are available
include:
Educator expenses
Early withdrawal penalties of saving accounts
Moving expenses
Business expenses
HSA contributions
Self-employment tax
Alimony payments
Tuition fees
Contributions to a traditional IRA
Student loan interest deduction
Health insurance premiums
Retirement account contribution
As it applies to compensation income, the general rule for sourcing wages and personal
services income is controlled by ________________________________. -
ANSWERwhere the service is performed The general rule for sourcing wages and
personal services income is controlled by where the service is performed. The
residence of the recipient of the service, the place of contracting, and the time and place
of payment are irrelevant.
Which is considered non-taxable income? - ANSWERmilitary personnel allowances
Payments received as a member of military service are generally taxed as wages
except for retirement pay, which is taxed as a pension. Allowances generally aren't
taxed.
______________ is used to offset income and payroll taxes for low-income workers and
to provide an incentive to work. - ANSWEREarned Income Tax Credit Earned Income
Tax Credit is used to offset income and payroll taxes for low-income workers and to
provide an incentive to work.
Which is a non-deductible business expense? - ANSWERfamily vacation Expenses
done for personal and recreational purposes are personal expenses and are non-
deductible.
,What amount of upper cap is applicable on business gifts? - ANSWER$25 The upper
cap of $25 is applicable on business gifts.
If yearly dividend amounts exceed __________, a Schedule B must be completed and
attached to Form 1040. - ANSWER$1500 If yearly dividend amounts exceed $1500, a
Schedule B must be completed and attached.
The are _________ filing statuses. - ANSWERfive There are five filing statuses.
Single
Married Filing Jointly
Married Filing Separately
Head of Household
Qualifying Widow(er)
Taxpayers can claim a Child Tax Credit of up to __________ for each child under age
17 in 2021(2022). - ANSWER$3,600.00 Taxpayers can claim a CTC of up to $3,600 for
each child under age 17 in 2021(2022). Since 2021, qualifying families may now receive
up to $3,600 per child under the age of 5 and $3,000 for those ages 6 to 17. That's up
from $2,000 per child, provided families fall under certain income thresholds (less than
$150,000 for couples and $112,500 for single parents).
______________ includes supplemental income and loss. - ANSWERSchedule E
includes supplemental income and loss
Supplemental Income and Loss consists of:
Income or Loss from Rental Real Estate and Royalties
Income or Loss from Partnerships and S Corporations
Income or Loss from Estates and Trusts, and
Income or Loss from Real Estate Mortgage Investment Conduits (REMICs)
Payments and refundable credits are listed between what lines on Form 1040? -
ANSWERLines 25 through 30 are payments and refundable credits.
A partnership files a tax return on ______________. - ANSWERA partnership files a tax
return on Form 1065.
Which of the following is not a requirement for S-Corporation election? - ANSWERBeing
an international entity is not a requirement for S-Corporation election.
________________ generally have to make estimated tax payments if they expect to
owe tax of $500 or more when their return is filed. - ANSWERCorporations generally
have to make estimated tax payments if they expect to owe tax of $500 or more when
their return is filed.
Which is not a nonrefundable tax credit? (Select all that apply) - ANSWERChild and
Dependent Care Credit Nonrefundable tax credits include:
, Child Tax Credit/Credit for Other Dependents
Adoption Credit
Social Security benefits can be taxed to a maximum of ___________% based on the
beneficiary's annual income. - ANSWERUp to 85% of your Social Security income is
taxed if you receive income from other sources and your combined income is more than
a certain base amount.
Which factor does not limit QBI components of QBI deduction? - ANSWERreported on
Schedule C
Who cannot take the standard deduction? (select all that apply) - ANSWERAn individual
filing as Married Filing Separately and the spouse itemizes An individual filing a return
for a short tax year due to a change in the annual accounting period A nonresident or
dual-status alien during the year
What type of payment is not considered miscellaneous? - ANSWERemployment wages
Miscellaneous income can include payments in the form of rents received, royalties,
medical and health care, crop insurance proceeds, refund or credits of state and local
taxes, unemployment compensation, and prizes and awards,
What dividend comes from mutual funds and real estate investment trusts (REITs)? -
ANSWERcapital gain Capital gain distributions come from mutual funds and real estate
investment trusts (REITs).
Which is not considered a gambling winning? - ANSWERgames of chance Gambling
winnings include, but are not limited to, money or prizes earned from:
Casino games
Slot machines
Keno
Poker tournaments
Lotteries
Sweepstakes
Raffles
Betting pools
Gameshows
Horse or dog races
Off-track betting
Bingo
Which is considered an adjustment to Gross Income? - ANSWERMoving Expense
Adjustments to gross income are divided into four categories: charitable items,
employment-related items, compensation and benefits, and investment-related
exclusions.
What does CFC stand for? - ANSWERControlled Foreign Corporation
QUESTIONS & ANSWERS
Below the line deductions include - ANSWERStandard deduction
Eligible educators can deduct up to _______ of qualified expenses paid during the tax
year. - ANSWER$250
Which of the following is an ineligible medical expense for HSA, Archer MSA, and MA
MSA? - ANSWERBreast enhancement
The net capital gain is taxed at _______ if the married filing jointly taxpayer income is
less than $80,800. - ANSWER0%
To claim a child as a dependent, they must meet the qualifying child test or
________________. - ANSWERqualifying relative test
Ordinary dividends are taxed at the same rate as __________ income tax rate. -
ANSWERordinary
Distributions from HSA, Archer MSA, or MS MSA are non-taxable when
_________________________________________. - ANSWERspent for qualified
medical expenses of your dependent
Which residency status is used when an individual is neither a U.S. citizen nor a
resident alien for tax purposes? - ANSWERNon-resident alien
_____________ and ____________ are what taxpayers must know to calculate their
tax amount. - ANSWERTaxable income and filing status
For mortgages entered into after December 15, 2017, the amount of interest the
taxpayer can deduct is no more than ______________ of the debt used to buy, build, or
substantially improve their principal home and a second home. - ANSWER750,000
__________ reduce the amount of tax due. - ANSWERTax credits
Which form is for beneficiaries who get income from trusts and estates? -
ANSWERForm 1041
___________________ consists of both earned and unearned income that is used to
calculate the tax. It is generally less than adjusted gross income due to the deductions. -
ANSWERTaxable income
,To satisfy the Substantial Presence Test, how many minimum days (in the current year)
must you be physically present in the United States? - ANSWER31
Complete the equation. ___________ = Selling Price - Purchase Price -
ANSWERCapital Loss or Capital Gain
_________________ helps sole proprietorships calculate the profit or loss from a
business while also providing the IRS with your total business income and deductions. -
ANSWERSchedule C
What type of deduction is a HSA contribution? - ANSWERAbove-the-Line Deduction
Some of the common expenses on which Above-the-Line deductions are available
include:
Educator expenses
Early withdrawal penalties of saving accounts
Moving expenses
Business expenses
HSA contributions
Self-employment tax
Alimony payments
Tuition fees
Contributions to a traditional IRA
Student loan interest deduction
Health insurance premiums
Retirement account contribution
As it applies to compensation income, the general rule for sourcing wages and personal
services income is controlled by ________________________________. -
ANSWERwhere the service is performed The general rule for sourcing wages and
personal services income is controlled by where the service is performed. The
residence of the recipient of the service, the place of contracting, and the time and place
of payment are irrelevant.
Which is considered non-taxable income? - ANSWERmilitary personnel allowances
Payments received as a member of military service are generally taxed as wages
except for retirement pay, which is taxed as a pension. Allowances generally aren't
taxed.
______________ is used to offset income and payroll taxes for low-income workers and
to provide an incentive to work. - ANSWEREarned Income Tax Credit Earned Income
Tax Credit is used to offset income and payroll taxes for low-income workers and to
provide an incentive to work.
Which is a non-deductible business expense? - ANSWERfamily vacation Expenses
done for personal and recreational purposes are personal expenses and are non-
deductible.
,What amount of upper cap is applicable on business gifts? - ANSWER$25 The upper
cap of $25 is applicable on business gifts.
If yearly dividend amounts exceed __________, a Schedule B must be completed and
attached to Form 1040. - ANSWER$1500 If yearly dividend amounts exceed $1500, a
Schedule B must be completed and attached.
The are _________ filing statuses. - ANSWERfive There are five filing statuses.
Single
Married Filing Jointly
Married Filing Separately
Head of Household
Qualifying Widow(er)
Taxpayers can claim a Child Tax Credit of up to __________ for each child under age
17 in 2021(2022). - ANSWER$3,600.00 Taxpayers can claim a CTC of up to $3,600 for
each child under age 17 in 2021(2022). Since 2021, qualifying families may now receive
up to $3,600 per child under the age of 5 and $3,000 for those ages 6 to 17. That's up
from $2,000 per child, provided families fall under certain income thresholds (less than
$150,000 for couples and $112,500 for single parents).
______________ includes supplemental income and loss. - ANSWERSchedule E
includes supplemental income and loss
Supplemental Income and Loss consists of:
Income or Loss from Rental Real Estate and Royalties
Income or Loss from Partnerships and S Corporations
Income or Loss from Estates and Trusts, and
Income or Loss from Real Estate Mortgage Investment Conduits (REMICs)
Payments and refundable credits are listed between what lines on Form 1040? -
ANSWERLines 25 through 30 are payments and refundable credits.
A partnership files a tax return on ______________. - ANSWERA partnership files a tax
return on Form 1065.
Which of the following is not a requirement for S-Corporation election? - ANSWERBeing
an international entity is not a requirement for S-Corporation election.
________________ generally have to make estimated tax payments if they expect to
owe tax of $500 or more when their return is filed. - ANSWERCorporations generally
have to make estimated tax payments if they expect to owe tax of $500 or more when
their return is filed.
Which is not a nonrefundable tax credit? (Select all that apply) - ANSWERChild and
Dependent Care Credit Nonrefundable tax credits include:
, Child Tax Credit/Credit for Other Dependents
Adoption Credit
Social Security benefits can be taxed to a maximum of ___________% based on the
beneficiary's annual income. - ANSWERUp to 85% of your Social Security income is
taxed if you receive income from other sources and your combined income is more than
a certain base amount.
Which factor does not limit QBI components of QBI deduction? - ANSWERreported on
Schedule C
Who cannot take the standard deduction? (select all that apply) - ANSWERAn individual
filing as Married Filing Separately and the spouse itemizes An individual filing a return
for a short tax year due to a change in the annual accounting period A nonresident or
dual-status alien during the year
What type of payment is not considered miscellaneous? - ANSWERemployment wages
Miscellaneous income can include payments in the form of rents received, royalties,
medical and health care, crop insurance proceeds, refund or credits of state and local
taxes, unemployment compensation, and prizes and awards,
What dividend comes from mutual funds and real estate investment trusts (REITs)? -
ANSWERcapital gain Capital gain distributions come from mutual funds and real estate
investment trusts (REITs).
Which is not considered a gambling winning? - ANSWERgames of chance Gambling
winnings include, but are not limited to, money or prizes earned from:
Casino games
Slot machines
Keno
Poker tournaments
Lotteries
Sweepstakes
Raffles
Betting pools
Gameshows
Horse or dog races
Off-track betting
Bingo
Which is considered an adjustment to Gross Income? - ANSWERMoving Expense
Adjustments to gross income are divided into four categories: charitable items,
employment-related items, compensation and benefits, and investment-related
exclusions.
What does CFC stand for? - ANSWERControlled Foreign Corporation
