Question 1

Most people pay the following taxes:

Accepted Answer

A) taxes on purchases. 
B) taxes on property. 
C) taxes on wealth. 
D) taxes on earnings. 
E) All of these 
A) taxes on purchases. 
B) taxes on property. 
C) taxes on wealth. 
D) taxes on earnings. 
E) All of these

Question 2

Alex Bates goes on The Price Is Right and earns $525,000 in winnings.What type of income is this?

Accepted Answer

A) Earned income 
B) Investment income 
C) Passive income 
D) Other income 
E) Deferred income 
A) Earned income 
B) Investment income 
C) Passive income 
D) Other income 
E) Deferred income

Question 3

Michele Walsh is considering an additional charitable contribution of $1,500 to a tax-deductible charity,bringing her total itemized deductions to $16,000.If Michele is in a 24 percent tax bracket,how much will this $1,500 contribution reduce her taxes?

Accepted Answer

A) $0 
B) $360 
C) $1,500 
D) $1,600 
E) $3,840 
A) $0 
B) $360 
C) $1,500 
D) $1,600 
E) $3,840

Question 4

Which one of these terms is defined as the use of legitimate methods to reduce one's taxes?

Accepted Answer

A) Tax evasion 
B) Tax avoidance 
C) Tax exemption 
D) Tax deferral 
E) Tax deduction 
A) Tax evasion 
B) Tax avoidance 
C) Tax exemption 
D) Tax deferral 
E) Tax deduction

Question 5

Which of the following good or service is subject to an excise tax?

Accepted Answer

A) Gasoline 
B) Tires 
C) Cigarettes 
D) Air travel 
E) All of these 
A) Gasoline 
B) Tires 
C) Cigarettes 
D) Air travel 
E) All of these

Question 6

Mr.and Mrs.Keating want to give their son Dudley a total of $30,000.They each write him a check for $15,000 so they won't have to pay any gift tax.This is an example of:

Accepted Answer

A) fraud. 
B) tax evasion. 
C) tax exclusion. 
D) tax avoidance. 
E) tax deferred income. 
A) fraud. 
B) tax evasion. 
C) tax exclusion. 
D) tax avoidance. 
E) tax deferred income.

Question 7

Factors that affect a person's filing status include marital status and:

Accepted Answer

A) employment status. 
B) age. 
C) occupation. 
D) dependents. 
E) place of residence. 
A) employment status. 
B) age. 
C) occupation. 
D) dependents. 
E) place of residence.

Question 8

When a taxpayer's income increases $1,000 and the taxes owed increases from $7,850 to $8,200,the marginal tax rate is ________ percent.

Accepted Answer

A) 12 
B) 22 
C) 24 
D) 32 
E) 35 
A) 12 
B) 22 
C) 24 
D) 32 
E) 35

Question 9

What kind of audit requires that a taxpayer visit an IRS office to clarify some aspect of his or her tax return?

Accepted Answer

A) Office audit 
B) Correspondence audit 
C) Field audit 
D) Taxpayer compliance measurement program audit 
E) Random audit 
A) Office audit 
B) Correspondence audit 
C) Field audit 
D) Taxpayer compliance measurement program audit 
E) Random audit

Question 10

The Tax Cuts and Jobs Act simplified the basic form used when filing your taxes,so that there is now only one form,Form 1040,to report your income.

Accepted Answer

A) True 
 B)False

Question 11

________ are expenses that a taxpayer is allowed to deduct from adjusted gross income.

Accepted Answer

A) Exemptions 
B) Exclusions 
C) Itemized deductions 
D) Tax credits 
E) Passive income 
A) Exemptions 
B) Exclusions 
C) Itemized deductions 
D) Tax credits 
E) Passive income

Question 12

A general sales tax is also referred to as an excise tax.

Accepted Answer

A) True 
 B)False

Question 13

Which one of these statements correctly applies to a Roth IRA?

Accepted Answer

A) Earnings on the account are tax-free after five years. 
B) Annual contributions may exceed $7,000. 
C) Deposits must be in federally-insured accounts. 
D) Funds are only to be used for educational expenses. 
E) Only self-employed workers can contribute to a Roth IRA. 
A) Earnings on the account are tax-free after five years. 
B) Annual contributions may exceed $7,000. 
C) Deposits must be in federally-insured accounts. 
D) Funds are only to be used for educational expenses. 
E) Only self-employed workers can contribute to a Roth IRA.

Question 14

A short-term capital gain is profit earned on an investment that is:

Accepted Answer

A) made involving small companies. 
B) not taxed as ordinary income. 
C) held for less than a year. 
D) in foreign companies. 
E) made only from real estate. 
A) made involving small companies. 
B) not taxed as ordinary income. 
C) held for less than a year. 
D) in foreign companies. 
E) made only from real estate.

Question 15

The principal purpose of taxes is to:

Accepted Answer

A) finance government activities. 
B) reduce the chances of inflation. 
C) create jobs. 
D) discourage use of certain goods and services. 
E) decrease competition from foreign companies. 
A) finance government activities. 
B) reduce the chances of inflation. 
C) create jobs. 
D) discourage use of certain goods and services. 
E) decrease competition from foreign companies.

Question 16

Which one of the following is a tax-deferred retirement plan sponsored by an employer?

Accepted Answer

A) Roth IRA 
B) Education savings account 
C) Keogh plan 
D) 401(k)plan 
E) 529 plan 
A) Roth IRA 
B) Education savings account 
C) Keogh plan 
D) 401(k)plan 
E) 529 plan

Question 17

Which one of the following items is a set amount of income on which no taxes are paid?

Accepted Answer

A) Medical expenses 
B) Standard deduction 
C) Deferred income 
D) Withholding 
E) Capital gains 
A) Medical expenses 
B) Standard deduction 
C) Deferred income 
D) Withholding 
E) Capital gains

Question 18

Which type of audit is the simplest and most common for taxpayers?

Accepted Answer

A) A field audit 
B) An office audit 
C) A research audit 
D) A correspondence audit 
E) A documentation audit 
A) A field audit 
B) An office audit 
C) A research audit 
D) A correspondence audit 
E) A documentation audit

Question 19

Taxpayers should beware of tax preparers who offer your refund in advance (refund anticipation loans)and charge interest rates exceeding 300 percent.

Accepted Answer

A) True 
 B)False

Question 20

Thomas Franklin claimed an additional $3,000 in deductions he knowingly knew he did not qualify for so he could reduce his tax bill.This is referred to as tax:

Accepted Answer

A) avoidance. 
B) acceleration. 
C) evasion. 
D) delaying. 
E) deferment. 
A) avoidance. 
B) acceleration. 
C) evasion. 
D) delaying. 
E) deferment.

Most people pay the following taxes:

Alex Bates goes on The Price Is Right and earns $525,000 in winnings.What type of income is this?

Michele Walsh is considering an additional charitable contribution of $1,500 to a tax-deductible charity,bringing her total itemized deductions to $16,000.If Michele is in a 24 percent tax bracket,how much will this $1,500 contribution reduce her taxes?

Which one of these terms is defined as the use of legitimate methods to reduce one's taxes?

Which of the following good or service is subject to an excise tax?

Mr.and Mrs.Keating want to give their son Dudley a total of $30,000.They each write him a check for $15,000 so they won't have to pay any gift tax.This is an example of:

Factors that affect a person's filing status include marital status and:

When a taxpayer's income increases $1,000 and the taxes owed increases from $7,850 to $8,200,the marginal tax rate is ________ percent.

What kind of audit requires that a taxpayer visit an IRS office to clarify some aspect of his or her tax return?

The Tax Cuts and Jobs Act simplified the basic form used when filing your taxes,so that there is now only one form,Form 1040,to report your income.

________ are expenses that a taxpayer is allowed to deduct from adjusted gross income.

A general sales tax is also referred to as an excise tax.

Which one of these statements correctly applies to a Roth IRA?

A short-term capital gain is profit earned on an investment that is:

The principal purpose of taxes is to:

Which one of the following is a tax-deferred retirement plan sponsored by an employer?

Which one of the following items is a set amount of income on which no taxes are paid?

Which type of audit is the simplest and most common for taxpayers?

Taxpayers should beware of tax preparers who offer your refund in advance (refund anticipation loans)and charge interest rates exceeding 300 percent.

Thomas Franklin claimed an additional $3,000 in deductions he knowingly knew he did not qualify for so he could reduce his tax bill.This is referred to as tax:

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

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Exam 4: Planning Your Tax Strategy

Most people pay the following taxes:

Alex Bates goes on The Price Is Right and earns $525,000 in winnings.What type of income is this?

Michele Walsh is considering an additional charitable contribution of $1,500 to a tax-deductible charity,bringing her total itemized deductions to $16,000.If Michele is in a 24 percent tax bracket,how much will this $1,500 contribution reduce her taxes?

Which one of these terms is defined as the use of legitimate methods to reduce one's taxes?

Which of the following good or service is subject to an excise tax?

Mr.and Mrs.Keating want to give their son Dudley a total of $30,000.They each write him a check for $15,000 so they won't have to pay any gift tax.This is an example of:

Factors that affect a person's filing status include marital status and:

When a taxpayer's income increases $1,000 and the taxes owed increases from $7,850 to $8,200,the marginal tax rate is ________ percent.

What kind of audit requires that a taxpayer visit an IRS office to clarify some aspect of his or her tax return?

The Tax Cuts and Jobs Act simplified the basic form used when filing your taxes,so that there is now only one form,Form 1040,to report your income.

________ are expenses that a taxpayer is allowed to deduct from adjusted gross income.

A general sales tax is also referred to as an excise tax.

Which one of these statements correctly applies to a Roth IRA?

A short-term capital gain is profit earned on an investment that is:

The principal purpose of taxes is to:

Which one of the following is a tax-deferred retirement plan sponsored by an employer?

Which one of the following items is a set amount of income on which no taxes are paid?

Which type of audit is the simplest and most common for taxpayers?

Taxpayers should beware of tax preparers who offer your refund in advance (refund anticipation loans)and charge interest rates exceeding 300 percent.

Thomas Franklin claimed an additional $3,000 in deductions he knowingly knew he did not qualify for so he could reduce his tax bill.This is referred to as tax:

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters