INTUIT ACADEMY TAX LEVEL 1 EXAM
QUESTIONS AND VERIFIED ANSWERS LATEST
2025-2026 TREND | AIM HIGHER GRADE A+
GUARANTEE
Which form is for beneficiaries who get income from trusts and estates?
- Answer-Form 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. - Answer-Taxable income
To satisfy the Substantial Presence Test, how many minimum days (in
the current year) must you be physically present in the United States? -
Answer-31
Complete the equation. ___________ = Selling Price - Purchase Price -
Answer-Capital 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. - Answer-Schedule C
What type of deduction is a HSA contribution? - Answer-Above-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
________________________________. - Answer-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? - Answer-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 low-
income workers and to provide an incentive to work. - Answer-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.
Below the line deductions include - Answer-Standard 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? - Answer-Breast enhancement
The net capital gain is taxed at _______ if the married filing jointly
taxpayer income is less than $80,800. - Answer-0%
To claim a child as a dependent, they must meet the qualifying child test
or ________________. - Answer-qualifying relative test
Ordinary dividends are taxed at the same rate as __________ income
tax rate. - Answer-ordinary
, Distributions from HSA, Archer MSA, or MS MSA are non-taxable
when _________________________________________. - Answer-
spent 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? - Answer-Non-resident
alien
_____________ and ____________ are what taxpayers must know to
calculate their tax amount. - Answer-Taxable 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. - Answer-750,000
__________ reduce the amount of tax due. - Answer-Tax credits
Which is a non-deductible business expense? - Answer-family 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
QUESTIONS AND VERIFIED ANSWERS LATEST
2025-2026 TREND | AIM HIGHER GRADE A+
GUARANTEE
Which form is for beneficiaries who get income from trusts and estates?
- Answer-Form 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. - Answer-Taxable income
To satisfy the Substantial Presence Test, how many minimum days (in
the current year) must you be physically present in the United States? -
Answer-31
Complete the equation. ___________ = Selling Price - Purchase Price -
Answer-Capital 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. - Answer-Schedule C
What type of deduction is a HSA contribution? - Answer-Above-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
________________________________. - Answer-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? - Answer-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 low-
income workers and to provide an incentive to work. - Answer-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.
Below the line deductions include - Answer-Standard 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? - Answer-Breast enhancement
The net capital gain is taxed at _______ if the married filing jointly
taxpayer income is less than $80,800. - Answer-0%
To claim a child as a dependent, they must meet the qualifying child test
or ________________. - Answer-qualifying relative test
Ordinary dividends are taxed at the same rate as __________ income
tax rate. - Answer-ordinary
, Distributions from HSA, Archer MSA, or MS MSA are non-taxable
when _________________________________________. - Answer-
spent 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? - Answer-Non-resident
alien
_____________ and ____________ are what taxpayers must know to
calculate their tax amount. - Answer-Taxable 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. - Answer-750,000
__________ reduce the amount of tax due. - Answer-Tax credits
Which is a non-deductible business expense? - Answer-family 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
