Intuit Academy Tax Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

A tax shelter is defined as a financial strategy specifically designed to reduce taxable income and, consequently, the amount of tax owed. This can be accomplished through various methods such as investments in certain assets, utilizing specific deductions, and taking advantage of tax-deferred accounts. The goal of a tax shelter is to legally minimize tax liabilities by lowering the reported income that is subject to taxation.

In contrast, the other choices describe different concepts related to tax but do not accurately define what a tax shelter is. A type of tax refund refers to the return of excess tax payments made by the taxpayer, which does not involve a strategy for minimizing income. A government-provided credit typically refers to a direct reduction in tax liability based on specific criteria, rather than a method to reduce taxable income. Tax filing status pertains to how an individual's income and deductions are categorized for tax purposes, which influences rates and eligibility for certain benefits but is not a strategy for minimizing taxable income.