Download Intuit Academy Tax Level 1 questions with ans(335 terms) and more Exams Nursing in PDF only on Docsity!
Intuit Academy Tax Level 1
questions with ans(335 terms)
reduce the amount of tax due. - Ans>>> Tax credits Which form is for beneficiaries who get income from trusts and estates? - Ans>>> 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. - Ans>>> 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? - Ans>>> 31 Complete the equation. ___________ = Selling Price - Purchase Price - Ans>>> 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. - Ans>>> Schedule C What type of deduction is a HSA contribution? - Ans>>> 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
If yearly dividend amounts exceed __________, a Schedule B must be completed and attached to Form 1040. - Ans>>> $1500 If yearly dividend amounts exceed $1500, a Schedule B must be completed and attached. The are _________ filing statuses. - Ans>>> 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). - Ans>>> $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. - Ans>>> 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? - Ans>>> Lines 25 through 30 are payments and refundable credits. A partnership files a tax return on ______________. - Ans>>> A partnership files a tax return on Form 1065. Which of the following is not a requirement for S-Corporation election? - Ans>>> 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. - Ans>>> Corporations
What type of payment is not considered miscellaneous? - Ans>>> 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)? - Ans>>> capital gain Capital gain distributions come from mutual funds and real estate investment trusts (REITs). Which is not considered a gambling winning? - Ans>>> games of chance Gambling winnings include, but are not limited to, money or prizes earned from: Casino games Slot machines Keno Poker tournaments Lotteries Sweepstakes Raffles Betting pools Gameshows Horse or dog races
Off-track betting Bingo Which is considered an adjustment to Gross Income? - Ans>>> Moving Expense Adjustments to gross income are divided into four categories: charitable items, employment-related items, compensation and benefits, and investment-related exclusions. What does CFC stand for? - Ans>>> Controlled Foreign Corporation The self-employed health insurance deduction is limited to the net self- employment profit shown on the return reduced by the deduction for ____________ of the self-employment tax. - Ans>>> one-half The self-employed health insurance deduction is limited to the net self-employment profit shown on the return reduced by the deduction for one-half of the self-employment tax. What is on Line 2b of Form 1040? - Ans>>> Taxable Interest Line 2b includes taxable interest. This line consists of the taxable interest earned from savings accounts, personal loans, certificates of deposits, and annuity contracts. An interest-paying institution will send these amounts on a Form 1099-INT to the taxpayer. If interest income exceeds $1500, a Schedule B will need to be completed and attached.
There are ________ types of Social Security trust funds. - Ans>>> two There are two types of Social Security trust funds. Rental income or compensation for the use of tangible property is sourced to the place where the rental property is ________________. - Ans>>> located Rental income or compensation for the use of tangible property is sourced to the place where the rental property is located. Taxable interest is reported on ________________. - Ans>>> Form 1099-INT Taxable interest is reported on Form 1099-INT. _______________ gains are gains on assets that you have held for one year or less. - Ans>>> Short-term Short-term gains are gains on assets that you have held for one year or less. A taxpayer's filing status determines the rate at which their income is taxed. - Ans>>> True Filing status is used to determine - Ans>>> Filing requirements Standard deduction Eligibility for certain credits Correct tax Each category has specific requirements the taxpayer must meet to claim that filing status, including what people live in the household and who contributes financially.
What are the five filing status types? - Ans>>> Single Head of Household Married filing jointly Married filing separately Qualifying widow(er) Single - Ans>>> Have never been married Divorced or legally separated Widowed before 01/01 of that year and no qualifying children Do not qualify for any other filing status (head of household) Head of Household - Ans>>> Provided more than half the cost of keeping up the home Is a qualifying person Live with you Qualifying Widow(er) - Ans>>> If your spouse passed away during the prior two tax years and you have not remarried and you have a qualifying dependent Married Filing Separately - Ans>>> If a person's spouse files separately, both spouses have to file separately Residency Status - Ans>>> Refers to a foreign national's legal status in a country where they are not citizen. In the United States, a lawful permanent resident (LPR) or Green Card holder refers to the immigration status of a foreign national who is authorized to live and work in the U.S. permanently.
Qualifying Dependents - Ans>>> Dependents may also be a qualifying, non-child relative. 1. Do you have a qualifying child? 2. Is your qualifying child your dependent? 3. Does your qualifying child qualify you for the child tax credit or credit for other dependents? 4. Is your qualifying relative your dependent? 5. Does your qualifying relative qualify you for the credit for other dependents? Qualifying Child - Ans>>> Lives with you half of the year Under the age of 19 Under the age of 24 and a full time student Disabled at any age Didn't provide over half of his or her own support for the tax year Is not filing a joint return for the tax year Is filing a joint return for the tax year only to claim a refund of withheld income tax or estimated tax paid. does not have to be your biological child but must have lived with the taxpayer for more than half of the year, meet specific age requirements, and be someone that didn't provide more than half of their support for the year. Every US citizen is required to file a tax return. - Ans>>> False Mia's niece and nephew live full-time with Mia, and her wife Judy. Mia and Judy provide full financial support for their niece and nephew. Can Mia and Judy claim their niece and nephew as dependents? - Ans>>> Yes, Mia and Judy can claim them as dependents.
Daniela is a divorced, single parent who has full custody of her twelve-year-old daughter. She receives alimony payments of $1400 per month. Daniela also takes care of her 68 year old father who lives in a residential care home. Which of the below are Daniela's qualifying dependent's? - Ans>>> Her daughter and father Daniela's father receives social security as his source of income. Does Daniela's father need to file a tax return? - Ans>>> No, Daniella's father doesn't need to file a tax return. Walter is married and lives with his spouse and 3 children. Can Walter file as a head of household? - Ans>>> No, Walter cannot claim head of household because he's married and lives with his spouse and 3 children. Dan lost his spouse, Pat, to a terminal illness last year. Dan and Pat have a ten year old daughter that is their dependent. Dan was qualified to file a married filing jointly return last year.
Vihaan is an Indian citizen. He came to the US to pursue a degree in veterinary medicine. He will be in the US for three years and intends to return home to India during breaks and once he's completed his degree. Based on the information above, what is Vihaan's filing status? - Ans>>> Vihaan meets the substantial presence test, and needs to file as a Resident Alien. A taxpayer's source of income is not important for the foreign tax credit (FTC) to offset U.S. taxes on foreign source income. - Ans>>> False 6 Types of Income Sources - Ans>>> Interest Dividend Compensation Rent And Royalty Sales of Property, Pension and Retirement Plans Miscellaneous - Flow Through Information Fringe Benefits A dividend from a foreign corporation may be U.S. source income? - Ans>>> True Which of the below are considered types of income? - Ans>>> Interest income Dividend income Sales of property Compensation
Income that is nontaxable should be be shown on the taxpayer's tax return. - Ans>>> True Business and investment income provides information on the treatment of certain income from: - Ans>>> Rent Royalties Partnership income A foreign corporation doing business in the U.S. receives interest income from Shruthi, a U.S. citizen and resident.Based on the information above, which of the following is true about the interest income? - Ans>>> The interest income is a U.S. source of income. Melissa, a U.S. citizen, received dividends from an Italian corporation with no U.S. ECI. Based on the information above, which of the following is true about the dividend income? - Ans>>> The dividend income is a foreign sourced income. Levi, a citizen and resident of the Netherlands, was contracted with a U.S. corporation to develop a new product. In developing this product, Levi worked in the U.S. for nine weeks. The entire project took twenty-one weeks. He was paid $265,000.
Meghan owns a daycare center she runs from her home. She also babysits for her brother on Saturdays. Her brother reimburses her expenses instead of paying her an hourly rate. Based on the information above, which of the following is true? - Ans>>> The expense reimbursement her brother provides is not taxable income. Mark is a member of our armed forces. He receives combat pay for his duties. Based on the information above, which of the following is true? - Ans>>> The amount of Mark's combat pay is not taxable. Which of the following is true about Judy's income? - Ans>>> Judy doesn't have to include the housing allowance in her income. Veronica's business partner gifted a watch to Veronica's wife as a fringe benefit. Based on the information above, which of the following is true? - Ans>>> The watch is taxable because it is considered to have been gifted to Veronica.
Veronica's business partner agrees to pay 25% of Veronica's income directly to her spouse. Does Veronica need to report the 25% paid to her spouse as income?
- Ans>>> Veronica must include the 25% paid to her spouse as income and it is taxable. Judy is a member of the clergy. She received a housing allowance. Which of the following is true about Judy's income? - Ans>>> Judy doesn't have to include the housing allowance in her income. Employers prepare Form W-2 at the end of each year.Which employees must receive a Form W-2? - Ans>>> Every employee that receives payment for services from the employer during the year. Parts of Form W-2 - Ans>>> 1. Taxable Income 2. Federal Tax Amount 3. Amount of Compensation subject to Social Security tax 4.Social Security Tax Withheld 5.Reports compensation subject to Medicare 6. Amount of Medicare tax withheld.
- All reported earnings from tips.
- What employer reports were earned as tips for the employee. 10. Reports the total dependent care benefits paid or incurred by the employer on behalf of an employee.
