INTUIT ACADEMY TAX LEVEL 1 PRACTICE
EXAMINATION 2026 QUESTIONS WITH
ANSWERS GRADED A+
• Below the line deductions include.
Answer: Standard deduction
• 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
• Eligible educators can deduct up to _______ of qualified expenses paid
during the tax year..
Answer: $250
• 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
• Which of the following is an ineligible medical expense for HSA, Archer
MSA, and MA MSA?.
Answer: Breast enhancement
• 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
• 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
• 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
• Ordinary dividends are taxed at the same rate as __________ income tax
rate..
Answer: ordinary
• __________ reduce the amount of tax due..
Answer: Tax credits
• Which form is for beneficiaries who get income from trusts and estates?.
Answer: Form 1041
• 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
• ___________________ 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
• _____________ and ____________ are what taxpayers must know to
calculate their tax amount..
Answer: Taxable income and filing status
• _________________ 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? 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.
Answer: Above-the-Line Deduction Some of the common expenses on
which Above-the-Line deductions are available include:
• 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.
• 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
• 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.
• __________ reduce the amount of tax due..
Answer: Tax credits
• ______________ 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
EXAMINATION 2026 QUESTIONS WITH
ANSWERS GRADED A+
• Below the line deductions include.
Answer: Standard deduction
• 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
• Eligible educators can deduct up to _______ of qualified expenses paid
during the tax year..
Answer: $250
• 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
• Which of the following is an ineligible medical expense for HSA, Archer
MSA, and MA MSA?.
Answer: Breast enhancement
• 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
• 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
• 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
• Ordinary dividends are taxed at the same rate as __________ income tax
rate..
Answer: ordinary
• __________ reduce the amount of tax due..
Answer: Tax credits
• Which form is for beneficiaries who get income from trusts and estates?.
Answer: Form 1041
• 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
• ___________________ 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
• _____________ and ____________ are what taxpayers must know to
calculate their tax amount..
Answer: Taxable income and filing status
• _________________ 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? 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.
Answer: Above-the-Line Deduction Some of the common expenses on
which Above-the-Line deductions are available include:
• 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.
• 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
• 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.
• __________ reduce the amount of tax due..
Answer: Tax credits
• ______________ 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
