Question 1

A special tax provision reduced the social security portion for the individual taxpayer by 2% in 2011 and 2012.

Accepted Answer

A) True 
 B)False

Question 2

If you do not wish to itemize deductions,you can use the

Accepted Answer

A)  pay-as-you-go amount. 
B)  bracket deduction. 
C)  standard deduction. 
D)  exemption. 
E)  withholding allowance. 
A)  pay-as-you-go amount. 
B)  bracket deduction. 
C)  standard deduction. 
D)  exemption. 
E)  withholding allowance.

Question 3

One's marginal tax rate is typical lower than one's average tax rate.

Accepted Answer

A) True 
 B)False

Question 4

The standard deduction in 2011 for a single filer is $5,800 and for married persons filing jointly is $11,600.

Accepted Answer

A) True 
 B)False

Question 5

A husband and wife would be the only couple combination that could file a joint return.

Accepted Answer

A) True 
 B)False

Question 6

Tom sold mutual fund shares he had owned 3 years so that he could use the proceeds to return to college.Tom is in the 15% marginal tax bracket and his capital gains from this sale were $11,000.How much tax would Tom owe on those gains?

Accepted Answer

A)  $11,000 
B)  $ 3,080 
C)  $ 1,650 
D)  $ 1,100 
E)  $ 550 
A)  $11,000 
B)  $ 3,080 
C)  $ 1,650 
D)  $ 1,100 
E)  $ 550

Question 7

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 terms "tax free" and "tax deferred" [do | do not] mean the same thing.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 8

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 Choose the word or phrase in [...

Question 9

If your AGI is less than $100,000 and you do not itemize deductions,the IRS will compute your taxes for you.

Accepted Answer

A) True 
 B)False

Question 10

The Robertsons,a couple with an AGI of $28,500,decided to contribute the maximum amount possible towards their IRAs even though Mr.Robertson had a pension plan at work.He named his wife as beneficiary of the IRA.What is such a tax strategy called?

Accepted Answer

A)  tax deferral since he'll have to pay taxes later when he withdraws the money 
B)  tax avoidance since he'll never have to pay taxes on the IRA contribution 
C)  tax evasion since this is illegal 
D)  tax ignorance since he can't deduct the contribution anyway due to his pension plan at work 
E)  income shifting to another person in a lower tax bracket 
A)  tax deferral since he'll have to pay taxes later when he withdraws the money 
B)  tax avoidance since he'll never have to pay taxes on the IRA contribution 
C)  tax evasion since this is illegal 
D)  tax ignorance since he can't deduct the contribution anyway due to his pension plan at work 
E)  income shifting to another person in a lower tax bracket

Question 11

The AMT includes in taxable income certain types of deductions otherwise allowed,such as state and local income and property taxes.

Accepted Answer

A) True 
 B)False

Question 12

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 lowest marginal tax rate is currently [10% | 35%].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 13

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 planning is [confined to the first quarter of the year | a year-round activity].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 14

Tax avoidance is legal,tax evasion is illegal.

Accepted Answer

A) True 
 B)False

Question 15

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 higher your income,the [greater | smaller] the probability you will be audited.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 16

Social Security taxes are paid on earned income and investment income.

Accepted Answer

A) True 
 B)False

Question 17

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.
-Qualified dividends are taxed at the same rates as [earned income | long-term capital gains].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 18

Which of the following state and local taxes are deductible on federal income taxes for those that itemize deductions?

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 19

The main objective of tax planning is to maximize the amount of money you keep by minimizing the amount of taxes you pay.

Accepted Answer

A) True 
 B)False

Question 20

You have up to three years after mailing your tax return to file an amended tax return (1040X).

Accepted Answer

A) True 
 B)False

A special tax provision reduced the social security portion for the individual taxpayer by 2% in 2011 and 2012.

If you do not wish to itemize deductions,you can use the

One's marginal tax rate is typical lower than one's average tax rate.

The standard deduction in 2011 for a single filer is $5,800 and for married persons filing jointly is $11,600.

A husband and wife would be the only couple combination that could file a joint return.

Tom sold mutual fund shares he had owned 3 years so that he could use the proceeds to return to college.Tom is in the 15% marginal tax bracket and his capital gains from this sale were $11,000.How much tax would Tom owe on those gains?

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 terms "tax free" and "tax deferred" [do | do not] mean the same thing.

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].

If your AGI is less than $100,000 and you do not itemize deductions,the IRS will compute your taxes for you.

The Robertsons,a couple with an AGI of $28,500,decided to contribute the maximum amount possible towards their IRAs even though Mr.Robertson had a pension plan at work.He named his wife as beneficiary of the IRA.What is such a tax strategy called?

The AMT includes in taxable income certain types of deductions otherwise allowed,such as state and local income and property taxes.

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 lowest marginal tax rate is currently [10% | 35%].

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 planning is [confined to the first quarter of the year | a year-round activity].

Tax avoidance is legal,tax evasion is illegal.

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 higher your income,the [greater | smaller] the probability you will be audited.

Social Security taxes are paid on earned income and investment income.

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. -Qualified dividends are taxed at the same rates as [earned income | long-term capital gains].

Which of the following state and local taxes are deductible on federal income taxes for those that itemize deductions?

The main objective of tax planning is to maximize the amount of money you keep by minimizing the amount of taxes you pay.

You have up to three years after mailing your tax return to file an amended tax return (1040X).

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

Filters

Exam 3: Preparing Your Taxes

A special tax provision reduced the social security portion for the individual taxpayer by 2% in 2011 and 2012.

If you do not wish to itemize deductions,you can use the

One's marginal tax rate is typical lower than one's average tax rate.

The standard deduction in 2011 for a single filer is $5,800 and for married persons filing jointly is $11,600.

A husband and wife would be the only couple combination that could file a joint return.

Tom sold mutual fund shares he had owned 3 years so that he could use the proceeds to return to college.Tom is in the 15% marginal tax bracket and his capital gains from this sale were $11,000.How much tax would Tom owe on those gains?

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 terms "tax free" and "tax deferred" [do | do not] mean the same thing.

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].

If your AGI is less than $100,000 and you do not itemize deductions,the IRS will compute your taxes for you.

The Robertsons,a couple with an AGI of $28,500,decided to contribute the maximum amount possible towards their IRAs even though Mr.Robertson had a pension plan at work.He named his wife as beneficiary of the IRA.What is such a tax strategy called?

The AMT includes in taxable income certain types of deductions otherwise allowed,such as state and local income and property taxes.

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 lowest marginal tax rate is currently [10% | 35%].

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 planning is [confined to the first quarter of the year | a year-round activity].

Tax avoidance is legal,tax evasion is illegal.

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 higher your income,the [greater | smaller] the probability you will be audited.

Social Security taxes are paid on earned income and investment income.

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. -Qualified dividends are taxed at the same rates as [earned income | long-term capital gains].

Which of the following state and local taxes are deductible on federal income taxes for those that itemize deductions?

The main objective of tax planning is to maximize the amount of money you keep by minimizing the amount of taxes you pay.

You have up to three years after mailing your tax return to file an amended tax return (1040X).

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

Filters