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Intuit Tax Level 1 Study Guide
1. Ford 1040, Line 1: Wages, salaries, tips, etc. Reflects income from form W2.
2. Form 1040 Line 2B: taxable interest; form 1099-INT
3. What is the child tax credit for each child under 17?: $
4. Net capital losses over $3000 can be carried forward indefinitely until
ex- hausted.: True
5. In 2021, Gustav bought a residential real estate property and rented it
full time on November 1, 2021. What schedule should he include with Form 1040?- : Schedule 1; Schedule E
6. Kahn received a Capital Gain Distribution reported on Form 1099-DIV, Box2a
and also received a 1099B reporting long term capital gains. What should he do when preparing the Form 1040?: Attach a schedule D
7. Schedule 1 (Form 1040): additional income and adjustments to income
8. Schedule 2 (Form 1040): additional taxes
9. Schedule 3 (Form 1040): Additional Credits and Payments
10. Schedule A (Form 1040): itemized deductions
11. Schedule B (Form 1040): Interest and Ordinary Dividends
12. Schedule D form 1040: Capital Gains and Losses
13. Schedule C (Form 1040): Profit or Loss from Business (Sole Proprietorship)
14. Schedule SE (Form 1040): self employment tax (SS tax)
15. Schedule E (Form 1040): Supplemental Income and Loss (From rental real estate, royalties,
partner- ships, S corporations, estates, trusts, REMICs, etc.)
16. Schedule EIC (Form 1040): Earned Income Credit for a qualifying child
17. Schedule 8812 (Form 1040): Additional child tax credit; refundable credit received if child tax
credit is greater than total amount of income taxes owed
18. Three conditions to not pay estimated tax for current year: 1. They had no
tax liability for prior year
2. They were a U.S citizen or resident alien for the whole year
3. Prior tax year covered 12 months
19. Form 2210: Underpayment of Estimated Tax by Individuals, Estates, and Trusts
20. Linda, a US resident and sole proprietor, expects that she will owe
$2500 and taxes for the current year. According to the IRS guidelines, which is true about Linda's estimated tax payments?: Linda must make estimated tax payments for the current year since her expected tax liability is $2500 or more
21. How to request an extension on taxes: - online payment option and check the box
a married filing jointly return last year. Is Dan a qualified widower?: Yes
27. 3 tax residency statuses for non- US citizens: Resident aliens, Non-resident aliens, and
Dual Status Aliens
28. Resident Alien: They meet the green card test or substantial presence test
29. Non-resident Alien: Neither a US citizen or resident alien
30. Dual status alien: A person whose status changes during the year from resident alien to non-
resident alien or vice versa.
31. During this tax year, Sunil changed their tax status from non-resident
alien to resident alien in the United States. Which forms may Sunil need to file?: Form 1040 and Form 1040NR
32. Erika's daughter, Julia, as a US citizen, living and working outside of
the US. Her annual income is $85,000. Which option is correct based on the information provided above?: Julia needs to file a US tax return.
33. 5 step process to determine a dependent: Step 1: Do you have a
qualifying child? Step 2: is quali. Child a dependent? Step 3: Does qual. Child qualify you for any credits? Step 4: Is qual. Relative tour dependent Step 5: Does qual. Relative qualify you for credits?
34. Every US citizen is required to file a tax return.: False
35. Global income: the combined total of a taxpayer's income earned both domestically and abroad.
36. Types of global income: interest, dividend, compensation, rent and royalty, and sales of
property, pension, and retirement plans, flow-through information, and fringe benefits
37. Determining profit motive: Regularity of the activities, Regularity of transactions,
production of income, ongoing ettorts to further the interests of the business
38. A dividend from a foreign corporation may be U.S. source income, if at
least 50 percent of the corporation's gross income for the preceding three years was effectively connected income (ECI).: True
39. A partnership has 60% foreign source ordinary income. Which
statement regarding the percentage of distribution is accurate?: The dividend is a foreign sourced income
40. What is the difference between tax credit and tax deduction?: Tax
deductions reduce taxable income and tax credits reduce the amount of tax due.
41. Muriel made a contribution to her IRA and paid her property taxes.
How would these deductions be treated on her tax return?: The IRA deduction is above the line and property tax is below the line.
42. Individual federal income tax formula: Total income-Adjustments to income-Standard
deduction or itemized deductions*Tax rate-Tax credits and Prepayments
43. Adjusted Gross Income (AGI): Total income - Adjustments to income
44. Situations that would require multi state filing: - Taxpayer moved to a different state
during the year except temporary moves for short-term work or school.
for his students. Of that amount, $180 was for educational software. The other $70 was for supplies. Based on information, how much of his expenses can Boyd deduct?: $0; He hasn't worked 900+ hours
50. Sandra has taken her first job after completing her college degree.
She is a single and paid $2,800 interest on her student loans during the tax year. Her MAGI is below the limits before making the student loan interest adjustment. How much can she deduct as an adjustment to income?: $
51. Alimony does not include: Child support and voluntary payments outside of the instrument
52. AGI: Total income - contribution to charity, retirement plan, student loan interest (tax deductible), alimony
prior to 2019, educator expenses, self employed health insurance,
53. Nontaxable Income: child support payments, welfare benefits, cash rebates, damage awards for
personal injury or sickness, gifts, inheritance, etc
54. Roth IRA: Qualified Distributions: One that is taken at least five years after the taxpayer
establishes his or her first Roth IRA and when he or she is age 59.5, disabled, using the withdrawal to purchase a first home (limit $10,000), or deceased (in which case the beneficiary collects).
55. Types of above the line expenses: Educator expenses, Early withdrawal of savings accounts,
moving expenses, Certain business expenses, HSA contributions, self-employment tax, alimony payments,
contrinutions to traditional IRA, student loan interest deduction, health insurance premiums, retirement account contribution
56. below the line contributions: charitable donations, medical expenses, mortgage interest, QBI
57. Your MAGI is always larger or equal to your AGI: True
58. Suppose your gross income is $100,000 this year and you qualify for
a standard deduction of $13,850. Let's say your effective tax rate is 22% (your effective tax rate is the percentage of your taxable income that you pay in taxes). How much do you save on your tax by applying the standard deduction?: $3,
59. Forms of deductions: Work-Related, Educational, Healthcare, and Investment related
60. Beau wants to file his income tax return as married filing separately.
His wife itemized her deductions. Can he use the standard deduction?: No
61. Violet paid a $50 entry fee to a charity race and received a T-shirt
after the race, valued at $5. How much can she deduct?: $
62. The foreign tax deduction must be itemized, that is, listed out on the
tax return. The sum of the listed items is used to lower a taxpayer's adjusted gross income (AGI).: False; it decreases taxable income not AGI
63. Aileen and Kenny want to file a joint return. They paid the following
medical and dental expenses:
to 85%
68. Nonrefundable tax credit: a tax credit that can reduce one's tax liability only to zero; however, if
the credit is more than the tax liability, the excess is not refunded
69. Earned Income Tax Credit: Refundable federal income tax credit for low to moderate income
working individuals and families, even if they did not earn enough money to be required to file a tax return
70. American Opportunity Tax Credit: a partially refundable tax credit of up to $2500 a year to
help defray college expenses for the first four years of postsecondary education
71. Lifetime Learning Tax Credit: - Maximum taxpayer income for eligibility is $66,000 (single) and
$132,000 (joint)
- Qualified higher education expenses of taxpayer, spouse or dependents ($2,000 credit per tax return)
- All years of post secondary education - undergraduate and graduate. Completion of degree or credential not required. No limit on the number of years.
72. Child and Dependent Care Credit: a tax credit that offsets your taxes in a direct dollar-for-
dollar manner for child and dependent care expenses
73. Saver's Tax Credit: For eligible contributions to retirement plans
74. Premium Tax Credit: a refundable credit for those who do not have employer health insurance and
buy via state or federal health insurance exchanges
75. ordinary income: income earned by a business through the sale of goods or services; is taxable at
ordinary rates
76. types of businesses: sole proprietorship, partnership, corporation, LLC
77. individuals with net earnings from Schedule C of more than _ must
report their earnings to Schedule SE.: $
78. Limited Liability Company (LLC): allowed by state statute. Banks and insurance companies
cannot be LLCs
79. Section 179 Deduction: a deduction targeted at small businesses that allows them to
immediately deduct asset purchases up to a certain limit rather than depreciating them over the assets' useful lives
80. to qualify for section 179 deduction asset must be:: tangible, used 50% of time,
bought from unrelated party, purchased for BUSINESS use, placed in service during the current tax year
81. standard mileage rate (2023): 65.5 cents per mile
82. actual expenses method includes: oil, gas, total miles covered, fuel, repairs, insurance,
tires, registration fee, depreciation or lease payments, licenses, etc.
83. Kevin sells his farm produce to an organic company and sends 3 gift
baskets worth $80 each to clients every year. He doesn't have an independent business relationship with those clients. What is the total deductible expense to claim for the gift baskets?: $75; there is an upper cap on $25 per gift to each client; 25*3=$
84. Dahlia is the owner of a software firm, and she invited one of her
clients to attend a baseball game where they also discussed business matters. Dahlia purchased two tickets for $150 each. While at the game, Dahlia bought burgers and soft drinks costing a total of $68.25. What amount can she claim for deduction?: $34.12; She cannot deduct cost of tickets but she can deduct 50% of food cost. 68.25/2=
87. How do you decide your tax home if you work in multiple locations?: Your
tax home is the location where you earn most of your income.
88. How to file income tax as a partner: preparing schedule k- 1
89. Which is the form used by general partnerships, limited partnerships
(LP), limited liability partnerships (LLPs), and certain limited liability companies (LLCs) to file Schedule K-1?: Form 1065
90. schedule k-1 form 1041: for beneficiaries who get income from trusts or estates
91. schedule k-1 form 1120-s: for shareholders and S corporations
92. Schedule K-1 includes information used to report:: - Tax deductions for the
partner
- Tax credits for the partner
- info about each partner's share in income and losses
- changes in partner's capital account during the year
93. Schedule K-1 ordinary business income is considered
earned income for .: General partners
94. In case you report a loss from a partnership or S corporation, your loss
may be reduced or not allowed for the year. You need to apply special rules to your loss on Schedule E. These rules must be applied in order. What is the
correct order of the special rules that limit losses?: Basis rules, at-risk rules, passive activity rules, excess business loss rules
