Intuit Academy Tax Practice Exam 2025 - Free Tax Practice Questions and Study Guide

Form 1040 serves the primary purpose of reporting an individual's total income and calculating their tax liability for the tax year. This form is the standard federal income tax form used by U.S. taxpayers, which allows them to detail all forms of income received, including wages, dividends, interest, and rental income. It also enables taxpayers to claim deductions and credits, ultimately determining their tax obligation or refund.

The aspects of the other options are either too narrow or do not encompass the full utility of the form. For example, it is not limited to the reporting of only business income or capital gains; rather, it is designed to cover all income sources. While claiming exemptions for dependents is a part of the tax filing process, it is only one aspect of what Form 1040 facilitates. Overall, the form's comprehensive nature makes it essential for understanding one's entire financial situation concerning tax obligations.