Exam 3: Preparing Your Taxes

Mr.and Mrs.Sanborn are retired and have had several medical problems this year.Their financial matters for 2008 are as follows: How much would the Sanborns' medical expenses contribute to their total itemized deductions?

(Multiple Choice)

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Question 21

Gifts received from family and friends are included in gross income.

(True/False)

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Question 22

The income shifting tax strategy is least effective when income producing gifts are given to persons

(Multiple Choice)

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Question 23

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 tax credit could result from [owning a home | adopting a child].

(Short Answer)

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Question 24

The tax rate on capital gains for most people is

(Multiple Choice)

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Question 25

Most major software providers have free online versions for preparing federal taxes for all taxpayers.

(True/False)

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Question 26

You should itemize deductions when total itemized deductions are less than the standard deduction.

(True/False)

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Question 27

Personal exemptions are tax deductions based on the number of taxpayers and dependents in the taxpayer's household.

(True/False)

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Question 28

Alimony received is included in gross income for the receiver and a tax deduction for the payer.

(True/False)

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Question 29

Jamie has taxable income of $45,000.She is single and her tax rates are 10% on the first $7,000 of taxable income,15% of the amount over $7,000 up to $28,400 of taxable income and 25% on the remainder.What is Jamie's tax liability,her marginal tax rate,and her average tax rate? (Show all work.)

(Essay)

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Question 30

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. -Your income tax filing status is determined primarily by your [income | marital] status.

(Short Answer)

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Question 31

Diana sold mutual fund shares she had owned 4 years so that she could use the proceeds to travel across Europe with her son.Diana is in the 35% marginal tax bracket and her capital gains from this sale were $30,000.How much tax would Diana owe on those gains?

(Multiple Choice)

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Question 32

The Congress writes and passes the Internal Revenue Code.

(True/False)

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Question 33

A taxpayer can file for an automatic extension of ___ months.

(Multiple Choice)

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Question 34

Municipal bond investments typically provide tax-free interest income.

(True/False)

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Question 35

Opening a traditional IRA would allow you to take advantage of tax free earnings.

(True/False)

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Question 36

Murray (age 68,single)just sold his home of 35 years so that he could relocate nearer his grandchildren.He realized a $400,000 capital gain on the home.How much of this gain will Murray have to pay taxes on? A) $400,000 B) $300,000 C) $250,000 D) $150,000 E) $ 0

(Short Answer)

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Question 37

A long-term capital gain,a investment held for more than 6 months,would be taxed at the same rate as earned income.

(True/False)

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Question 38

Tax credits are dollar-for-dollar reductions in taxable income.

(True/False)

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Question 39

Itemized deductions are listed on Schedule

(Multiple Choice)

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Question 40

Showing 21 - 40 of 201

Mr.and Mrs.Sanborn are retired and have had several medical problems this year.Their financial matters for 2008 are as follows: How much would the Sanborns' medical expenses contribute to their total itemized deductions?

Gifts received from family and friends are included in gross income.

The income shifting tax strategy is least effective when income producing gifts are given to persons

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 tax credit could result from [owning a home | adopting a child].

The tax rate on capital gains for most people is

Most major software providers have free online versions for preparing federal taxes for all taxpayers.

You should itemize deductions when total itemized deductions are less than the standard deduction.

Personal exemptions are tax deductions based on the number of taxpayers and dependents in the taxpayer's household.

Alimony received is included in gross income for the receiver and a tax deduction for the payer.

Jamie has taxable income of $45,000.She is single and her tax rates are 10% on the first $7,000 of taxable income,15% of the amount over $7,000 up to $28,400 of taxable income and 25% on the remainder.What is Jamie's tax liability,her marginal tax rate,and her average tax rate? (Show all work.)

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. -Your income tax filing status is determined primarily by your [income | marital] status.

Diana sold mutual fund shares she had owned 4 years so that she could use the proceeds to travel across Europe with her son.Diana is in the 35% marginal tax bracket and her capital gains from this sale were $30,000.How much tax would Diana owe on those gains?

The Congress writes and passes the Internal Revenue Code.

A taxpayer can file for an automatic extension of ___ months.

Municipal bond investments typically provide tax-free interest income.

Opening a traditional IRA would allow you to take advantage of tax free earnings.

Murray (age 68,single)just sold his home of 35 years so that he could relocate nearer his grandchildren.He realized a $400,000 capital gain on the home.How much of this gain will Murray have to pay taxes on? A) $400,000 B) $300,000 C) $250,000 D) $150,000 E) $ 0

A long-term capital gain,a investment held for more than 6 months,would be taxed at the same rate as earned income.

Tax credits are dollar-for-dollar reductions in taxable income.

Itemized deductions are listed on Schedule

Understanding the Financial Planning Process

Using Financial Statements and Budgets

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

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