INTUIT ACADEMY TAX LEVEL 1
QUESTIONS AND ANSWERS
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 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.
,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 dividend amounts exceed $1500, a Schedule B must be
completed and attached.
The are filing statuses. - ANSWER-five 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. - ANSWER-Schedule 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? - ANSWER-Lines
25 through 30 are payments and refundable credits.
A partnership files a tax return on . - ANSWER-A partnership files a tax return
on Form 1065.
, Which of the following is not a requirement for S-Corporation election? - ANSWER-Being 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. - ANSWER-Corporations 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) - ANSWER-Child 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. - ANSWER-Up 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? - ANSWER-reported on Schedule
C
Who cannot take the standard deduction? (select all that apply) - ANSWER-An 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? - ANSWER-employment 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)? - ANSWER-
capital gain Capital gain distributions come from mutual funds and real estate investment trusts
(REITs).
Which is not considered a gambling winning? - ANSWER-games of chance Gambling winnings
include, but are not limited to, money or prizes earned from:
Casino games
Slot machines
Keno
QUESTIONS AND ANSWERS
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 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.
,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 dividend amounts exceed $1500, a Schedule B must be
completed and attached.
The are filing statuses. - ANSWER-five 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. - ANSWER-Schedule 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? - ANSWER-Lines
25 through 30 are payments and refundable credits.
A partnership files a tax return on . - ANSWER-A partnership files a tax return
on Form 1065.
, Which of the following is not a requirement for S-Corporation election? - ANSWER-Being 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. - ANSWER-Corporations 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) - ANSWER-Child 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. - ANSWER-Up 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? - ANSWER-reported on Schedule
C
Who cannot take the standard deduction? (select all that apply) - ANSWER-An 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? - ANSWER-employment 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)? - ANSWER-
capital gain Capital gain distributions come from mutual funds and real estate investment trusts
(REITs).
Which is not considered a gambling winning? - ANSWER-games of chance Gambling winnings
include, but are not limited to, money or prizes earned from:
Casino games
Slot machines
Keno
