Question 1

Your income tax withholding is dependent on

Accepted Answer

A)  income level and deductions. 
B)  deductions and age. 
C)  income level and number of withholding allowances. 
D)  number of withholding allowances and deductions. 
E)  number of withholding allowances and dependents. 
A)  income level and deductions. 
B)  deductions and age. 
C)  income level and number of withholding allowances. 
D)  number of withholding allowances and deductions. 
E)  number of withholding allowances and dependents.

Question 2

The tax rate on capital gains for most people is

Accepted Answer

A)  the same as on regular income. 
B)  dependent on the time the asset was owned. 
C)  dependent on the amount of profit earned. 
D)  higher than the rate on regular income. 
E)  None of these. 
A)  the same as on regular income. 
B)  dependent on the time the asset was owned. 
C)  dependent on the amount of profit earned. 
D)  higher than the rate on regular income. 
E)  None of these.

Question 3

Itemized deductions are listed on Schedule

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
E)  F. 
A)  A. 
B)  B. 
C)  C. 
D)  D. 
E)  F.

Question 4

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement.
-Russ and Lois got married December 30.Since they were single for most of the year,however,they can legally file as married taxpayers in the year of the wedding.

Accepted Answer

A) True 
 B)False

Question 5

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement.
-Tax avoidance is legal,tax evasion is illegal.

Accepted Answer

A) True 
 B)False

Question 6

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement.
-Usually a married couple will pay less income tax if they file [jointly | separately].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 7

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement.
-The Medicare portion of the Social Security tax is paid on 100% of earnings.

Accepted Answer

A) True 
 B)False

Question 8

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement.
-A couple will usually incur a lower tax liability if they choose "married,filing jointly" rather than "married,filing a separately."

Accepted Answer

A) True 
 B)False

Question 9

Sue and Tim are married taxpayers in the 33% marginal tax bracket.In 2008,they sold common stock shares for a long-term capital gain of $3,800.They also sold some technology stock for a long-term capital loss of $9,000.In addition,they sold the home they had lived in for the past 10 years and experienced a $75,000 gain on the house.How much will their net capital gains (or losses)be for 2008? How much will they pay (or save)in taxes as a result of these transactions?

Accepted Answer

$3,000 capital loss this year with a $2,

Question 10

You purchased and lived in your home 8 years.Now you have received an excellent promotion,but you will have to sell your home and move to another community.The capital gains on the home sold will

Accepted Answer

A)  be taxable as ordinary income. 
B)  be taxable at the 15% tax bracket. 
C)  be taxable at the appropriate long-term capital gains rate. 
D)  not be taxable because the home was your principal residence. 
E)  not be taxable because this is a job-related move. 
A)  be taxable as ordinary income. 
B)  be taxable at the 15% tax bracket. 
C)  be taxable at the appropriate long-term capital gains rate. 
D)  not be taxable because the home was your principal residence. 
E)  not be taxable because this is a job-related move.

Question 11

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement.
-Tax [avoidance | evasion] is a perfectly legal practice.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 12

Your average tax rate is your

Accepted Answer

A)  adjusted gross income divided by tax withheld. 
B)  adjusted gross income divided by tax liability. 
C)  tax liability divided by taxable income. 
D)  taxable income divided by tax withheld. 
E)  gross income divided by tax refund. 
A)  adjusted gross income divided by tax withheld. 
B)  adjusted gross income divided by tax liability. 
C)  tax liability divided by taxable income. 
D)  taxable income divided by tax withheld. 
E)  gross income divided by tax refund.

Question 13

Typically state governments get most of their tax revenue from

Accepted Answer

A)  property taxes and excise taxes. 
B)  sales taxes and income taxes. 
C)  licensing fees and income taxes. 
D)  excise taxes and sales taxes. 
E)  income taxes and property taxes. 
A)  property taxes and excise taxes. 
B)  sales taxes and income taxes. 
C)  licensing fees and income taxes. 
D)  excise taxes and sales taxes. 
E)  income taxes and property taxes.

Question 14

Marginal tax and average tax rate refer to the same thing.

Accepted Answer

A) True 
 B)False

Question 15

Persons who work for more than one employer in any year will owe more Social Security taxes than if all their income was earned from a single employer.

Accepted Answer

A) True 
 B)False

Question 16

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement.
-One's average tax rate is typically lower than one's marginal tax rate.

Accepted Answer

A) True 
 B)False

Question 17

All taxpayers have an equal probability of having their tax returns audited.

Accepted Answer

A) True 
 B)False

Question 18

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement.
-Tax credits directly reduce a taxpayer's [taxes due | taxable income].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 19

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement.
-Earnings from real estate investments are an example of [active | passive] income.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 20

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement.
-If you are eligible to receive a tax refund,you will have to file a tax return to get the refund.

Accepted Answer

A) True 
 B)False

Your income tax withholding is dependent on

The tax rate on capital gains for most people is

Itemized deductions are listed on Schedule

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Tax avoidance is legal,tax evasion is illegal.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Usually a married couple will pay less income tax if they file [jointly | separately].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -The Medicare portion of the Social Security tax is paid on 100% of earnings.

You purchased and lived in your home 8 years.Now you have received an excellent promotion,but you will have to sell your home and move to another community.The capital gains on the home sold will

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Tax [avoidance | evasion] is a perfectly legal practice.

Your average tax rate is your

Typically state governments get most of their tax revenue from

Marginal tax and average tax rate refer to the same thing.

Persons who work for more than one employer in any year will owe more Social Security taxes than if all their income was earned from a single employer.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -One's average tax rate is typically lower than one's marginal tax rate.

All taxpayers have an equal probability of having their tax returns audited.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Tax credits directly reduce a taxpayer's [taxes due | taxable income].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Earnings from real estate investments are an example of [active | passive] income.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -If you are eligible to receive a tax refund,you will have to file a tax return to get the refund.

Understanding the Financial Planning Process

Your Financial Statements and Plans

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

Exam 3: Preparing Your Taxes

Your income tax withholding is dependent on

The tax rate on capital gains for most people is

Itemized deductions are listed on Schedule

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Tax avoidance is legal,tax evasion is illegal.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Usually a married couple will pay less income tax if they file [jointly | separately].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -The Medicare portion of the Social Security tax is paid on 100% of earnings.

You purchased and lived in your home 8 years.Now you have received an excellent promotion,but you will have to sell your home and move to another community.The capital gains on the home sold will

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Tax [avoidance | evasion] is a perfectly legal practice.

Your average tax rate is your

Typically state governments get most of their tax revenue from

Marginal tax and average tax rate refer to the same thing.

Persons who work for more than one employer in any year will owe more Social Security taxes than if all their income was earned from a single employer.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -One's average tax rate is typically lower than one's marginal tax rate.

All taxpayers have an equal probability of having their tax returns audited.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Tax credits directly reduce a taxpayer's [taxes due | taxable income].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Earnings from real estate investments are an example of [active | passive] income.

Understanding the Financial Planning Process

Your Financial Statements and Plans

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters