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Intuit Academy Tax Level 1 Exam 2026 – Complete Practice
Questions, Step-by-Step Filing Scenarios, and Expert Answers
for Beginners Preparing for Federal Tax Certification
John (age 45) and Denise (age 42) are married and live together in Texas. They are filing a joint
federal tax return for the 2025 tax year. Their situation is as follows:
Income:
• John: $65,000 from W-2 wages
• Denise: $40,000 from W-2 wages
• Interest income: $500 (joint bank account)
• Dividend income: $200
Adjustments:
• John contributed $6,000 to a traditional IRA
• Denise contributed $3,000 to a traditional IRA
Deductions:
• They are choosing standard deduction for Married Filing Jointly ($27,700 for 2025)
Credits:
• They have two children, ages 10 and 7
• Paid $8,000 for childcare while working
Other Info:
• They both have health insurance coverage through their employers
• They had $1,000 in federal income tax withheld from paychecks
Questions
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1. What is John and Denise’s total gross income?
A. $105,700
B. $105,700 + interest/dividends
C. $105,700 + adjustments
D. $105,700 + standard deduction
Answer: B ($65,000 + $40,000 + $500 + $200 = $105,700)
2. What is their adjusted gross income (AGI)?
A. $105,700
B. $96,700
C. $96,400
D. $105,000
Answer: C (Gross income $105,700 – IRA contributions $9,300 = $96,400)
3. What is their taxable income?
A. $68,700
B. $96,400
C. $105,700
D. $27,700
Answer: A (AGI $96,400 – standard deduction $27,700 = $68,700)
4. How much child tax credit are they eligible for?
A. $4,000
B. $5,000
C. $6,000
D. $7,000
Answer: C ($2,000 per child × 2 children = $4,000; for 2025, assume the full $2,000 per
child credit applies)
5. How much child and dependent care credit can they claim?
A. $3,000
B. $1,600
C. $800
D. $1,200
Answer: B (Maximum qualifying expense for two children = $8,000; credit rate 20% =
$1,600)
Taxable Income Formula
Total Income - Tax Deductions - Total Exemptions - Total Rebate
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Taxpayers can claim a Child Tax Credit of up to __________ for
each child under age 17 in 2021(2022).
$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).
The IRS requires you to keep detailed records of your gambling
winnings and losses as well as any related documents, including
receipts, tickets, payment slips, statements, and Form W-2G.
You must be able to _________________________.
Report your gambling winnings and gambling losses. You may be
able to deduct your losses if you have itemized deductions.
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As it applies to compensation income, the general rule for
sourcing wages and personal services income is controlled by
________________________________.
where 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?
military 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
lowincome workers and to provide an incentive to work.
Earned 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.
Intuit Academy Tax Level 1 Exam 2026 – Complete Practice
Questions, Step-by-Step Filing Scenarios, and Expert Answers
for Beginners Preparing for Federal Tax Certification
John (age 45) and Denise (age 42) are married and live together in Texas. They are filing a joint
federal tax return for the 2025 tax year. Their situation is as follows:
Income:
• John: $65,000 from W-2 wages
• Denise: $40,000 from W-2 wages
• Interest income: $500 (joint bank account)
• Dividend income: $200
Adjustments:
• John contributed $6,000 to a traditional IRA
• Denise contributed $3,000 to a traditional IRA
Deductions:
• They are choosing standard deduction for Married Filing Jointly ($27,700 for 2025)
Credits:
• They have two children, ages 10 and 7
• Paid $8,000 for childcare while working
Other Info:
• They both have health insurance coverage through their employers
• They had $1,000 in federal income tax withheld from paychecks
Questions
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1. What is John and Denise’s total gross income?
A. $105,700
B. $105,700 + interest/dividends
C. $105,700 + adjustments
D. $105,700 + standard deduction
Answer: B ($65,000 + $40,000 + $500 + $200 = $105,700)
2. What is their adjusted gross income (AGI)?
A. $105,700
B. $96,700
C. $96,400
D. $105,000
Answer: C (Gross income $105,700 – IRA contributions $9,300 = $96,400)
3. What is their taxable income?
A. $68,700
B. $96,400
C. $105,700
D. $27,700
Answer: A (AGI $96,400 – standard deduction $27,700 = $68,700)
4. How much child tax credit are they eligible for?
A. $4,000
B. $5,000
C. $6,000
D. $7,000
Answer: C ($2,000 per child × 2 children = $4,000; for 2025, assume the full $2,000 per
child credit applies)
5. How much child and dependent care credit can they claim?
A. $3,000
B. $1,600
C. $800
D. $1,200
Answer: B (Maximum qualifying expense for two children = $8,000; credit rate 20% =
$1,600)
Taxable Income Formula
Total Income - Tax Deductions - Total Exemptions - Total Rebate
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Taxpayers can claim a Child Tax Credit of up to __________ for
each child under age 17 in 2021(2022).
$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).
The IRS requires you to keep detailed records of your gambling
winnings and losses as well as any related documents, including
receipts, tickets, payment slips, statements, and Form W-2G.
You must be able to _________________________.
Report your gambling winnings and gambling losses. You may be
able to deduct your losses if you have itemized deductions.
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As it applies to compensation income, the general rule for
sourcing wages and personal services income is controlled by
________________________________.
where 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?
military 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
lowincome workers and to provide an incentive to work.
Earned 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.
