Intuit Academy Tax Level 1 UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Below the line deductions include - CORRECT ANSWER - Standard deduction
Eligible educators can deduct up to _______ of qualified expenses paid during the tax year. -
CORRECT ANSWER - $250
Which of the following is an ineligible medical expense for HSA, Archer MSA, and MA MSA? -
CORRECT ANSWER - Breast enhancement
The net capital gain is taxed at _______ if the married filing jointly taxpayer income is less than
$80,800. - CORRECT ANSWER - 0%
To claim a child as a dependent, they must meet the qualifying child test or ________________.
- CORRECT ANSWER - qualifying relative test
Ordinary dividends are taxed at the same rate as __________ income tax rate. - CORRECT
ANSWER - ordinary
Distributions from HSA, Archer MSA, or MS MSA are non-taxable when
_________________________________________. - CORRECT 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? - CORRECT ANSWER - Non-resident alien
_____________ and ____________ are what taxpayers must know to calculate their tax amount.
- CORRECT 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. - CORRECT ANSWER - 750,000
__________ reduce the amount of tax due. - CORRECT ANSWER - Tax credits
Which form is for beneficiaries who get income from trusts and estates? - CORRECT
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. - CORRECT
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? - CORRECT ANSWER - 31
Complete the equation. ___________ = Selling Price - Purchase Price - CORRECT
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. - CORRECT
ANSWER - Schedule C
What type of deduction is a HSA contribution? - CORRECT 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 ________________________________. - CORRECT 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? - CORRECT 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. - CORRECT 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? - CORRECT 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? - CORRECT 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. - CORRECT ANSWER - $1500 If yearly dividend amounts exceed $1500, a
Schedule B must be completed and attached.
The are _________ filing statuses. - CORRECT 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). - CORRECT 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. - CORRECT 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? - CORRECT
ANSWER - Lines 25 through 30 are payments and refundable credits.
ACTUAL Exam Questions and CORRECT
Answers
Below the line deductions include - CORRECT ANSWER - Standard deduction
Eligible educators can deduct up to _______ of qualified expenses paid during the tax year. -
CORRECT ANSWER - $250
Which of the following is an ineligible medical expense for HSA, Archer MSA, and MA MSA? -
CORRECT ANSWER - Breast enhancement
The net capital gain is taxed at _______ if the married filing jointly taxpayer income is less than
$80,800. - CORRECT ANSWER - 0%
To claim a child as a dependent, they must meet the qualifying child test or ________________.
- CORRECT ANSWER - qualifying relative test
Ordinary dividends are taxed at the same rate as __________ income tax rate. - CORRECT
ANSWER - ordinary
Distributions from HSA, Archer MSA, or MS MSA are non-taxable when
_________________________________________. - CORRECT 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? - CORRECT ANSWER - Non-resident alien
_____________ and ____________ are what taxpayers must know to calculate their tax amount.
- CORRECT 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. - CORRECT ANSWER - 750,000
__________ reduce the amount of tax due. - CORRECT ANSWER - Tax credits
Which form is for beneficiaries who get income from trusts and estates? - CORRECT
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. - CORRECT
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? - CORRECT ANSWER - 31
Complete the equation. ___________ = Selling Price - Purchase Price - CORRECT
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. - CORRECT
ANSWER - Schedule C
What type of deduction is a HSA contribution? - CORRECT 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 ________________________________. - CORRECT 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? - CORRECT 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. - CORRECT 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? - CORRECT 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? - CORRECT 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. - CORRECT ANSWER - $1500 If yearly dividend amounts exceed $1500, a
Schedule B must be completed and attached.
The are _________ filing statuses. - CORRECT 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). - CORRECT 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. - CORRECT 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? - CORRECT
ANSWER - Lines 25 through 30 are payments and refundable credits.
