Question 1

The federal government receives a majority of its revenue from ____ taxes.

Accepted Answer

A)  sales 
B)  property 
C)  excise 
D)  income 
E)  estate 
A)  sales 
B)  property 
C)  excise 
D)  income 
E)  estate D

Question 2

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

Accepted Answer

b

Question 3

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 [ capital gains tax | alternative minimum tax (AMT) ] is designed to ensure that high-income taxpayers with many deductions and tax shelter investments that provide attractive tax write-offs are paying their fair share of taxes .

Accepted Answer

b

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. 
[ Interest | Child support ] received would be reported as taxable income.

Accepted Answer

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

Question 5

Which of the following statements regarding the tax levied under the Federal Insurance Contributions Act (FICA) is true?

Accepted Answer

A)  It is also known more commonly as property tax. 
B)  It is paid equally by employer and employee. 
C)  It is not applicable to self-employed persons. 
D)  It applies only to the first $100,000 of an employee's earnings. 
E)  It is used to provide insurance against theft. 
A)  It is also known more commonly as property tax. 
B)  It is paid equally by employer and employee. 
C)  It is not applicable to self-employed persons. 
D)  It applies only to the first $100,000 of an employee's earnings. 
E)  It is used to provide insurance against theft.

Question 6

Sarah is a homeowner and a single taxpayer. She has owned and occupied the house as a principal residence for the last 8 years. In the current taxable year, she receives a promotion. She sells her home and moves to another area. The capital gain on the sale of the principal residence will:

Accepted Answer

A)  be taxable as ordinary income. 
B)  be taxable at a rate of 25%. 
C)  be taxable at the appropriate short-term capital gains rate. 
D)  be taxable excluding the first $250,000 of the gain. 
E)  not be taxable because the relocation is a job-related move. 
A)  be taxable as ordinary income. 
B)  be taxable at a rate of 25%. 
C)  be taxable at the appropriate short-term capital gains rate. 
D)  be taxable excluding the first $250,000 of the gain. 
E)  not be taxable because the relocation is a job-related move.

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. 
Interest income from a checking account should be reported on Schedule [ B | F ] of Form 1040.

Accepted Answer

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

Question 8

Ben is 67 years old and single. He is also legally blind. When filing his 2018 income taxes, he opts to take the standard deduction rather than itemizing personal deductions. How much is Ben's standard deduction?

Accepted Answer

A)  $0 
B)  $12,000 
C)  $13,600 
D)  $15,200 
E)  $24,000 
A)  $0 
B)  $12,000 
C)  $13,600 
D)  $15,200 
E)  $24,000

Question 9

For those under the age of 65, medical and dental expenses may be included as itemized deductions:

Accepted Answer

A)  when they exceed 4% of adjusted gross income (AGI). 
B)  up to a maximum of $7,500 per individual per tax year. 
C)  only if they are less than 20% of gross income. 
D)  only for amounts in excess of 10% of adjusted gross income (AGI). 
E)  when they exceed 2% of taxable income. 
A)  when they exceed 4% of adjusted gross income (AGI). 
B)  up to a maximum of $7,500 per individual per tax year. 
C)  only if they are less than 20% of gross income. 
D)  only for amounts in excess of 10% of adjusted gross income (AGI). 
E)  when they exceed 2% of taxable income.

Question 10

Henry is married to Lillian, and they have two dependent children. Both of them want to file their own tax returns, reporting only his or her own income, deductions, and exemptions. The filing status of Henry and Lillian is:

Accepted Answer

A)  single taxpayer. 
B)  married filing jointly. 
C)  head of household. 
D)  qualifying widow or widower with dependent child. 
E)  married filing separately. 
A)  single taxpayer. 
B)  married filing jointly. 
C)  head of household. 
D)  qualifying widow or widower with dependent child. 
E)  married filing separately.

Question 11

Income shifting refers to the process of transferring income from the taxpayer to the Internal Revenue Service (IRS).

Accepted Answer

A) True 
 B)False

Question 12

The alternative minimum tax (AMT) is applicable to taxpayers with moderate levels of income only.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Peter's tax computed per the tax rate schedule amounts to $2,000, and his tax credits amount to $500. His total tax liability is:

Accepted Answer

A)  $2,500. 
B)  $1,500. 
C)  $3,000. 
D)  $2,200. 
E)  $4,000. 
A)  $2,500. 
B)  $1,500. 
C)  $3,000. 
D)  $2,200. 
E)  $4,000.

Question 15

Qualified dividends are taxed at a higher rate than long-term capital gains.

Accepted Answer

A) True 
 B)False

Question 16

From the following information, determine Marcie's gross income for tax purposes.

Accepted Answer

Marcie's Gross Incom

Question 17

When an individual gives his or her child an income-producing asset, he or she is:

Accepted Answer

A)  shifting his or her income. 
B)  maximizing his or her deductions. 
C)  deferring his or her tax. 
D)  executing his or her will. 
E)  reducing his or her taxes by using technology. 
A)  shifting his or her income. 
B)  maximizing his or her deductions. 
C)  deferring his or her tax. 
D)  executing his or her will. 
E)  reducing his or her taxes by using technology.

Question 18

A tax credit could result from:

Accepted Answer

A)  owning a home. 
B)  adopting a child. 
C)  charitable contributions. 
D)  investing in municipal bonds. 
E)  dental expenses. 
A)  owning a home. 
B)  adopting a child. 
C)  charitable contributions. 
D)  investing in municipal bonds. 
E)  dental expenses.

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. 
Christy lives with her dog, Tex, who is dependent on her for support. She [ can | cannot ] use the head of household filing status.

Accepted Answer

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

Question 20

A progressive tax structure is one in which:

Accepted Answer

A)  tax rates are directly proportional to inflation rates. 
B)  the larger the amount of taxable income, the higher the rate at which it is taxed. 
C)  tax rates are inversely related to inflation rates. 
D)  everyone pays the same income tax rate. 
E)  no exemptions or deductions are available. 
A)  tax rates are directly proportional to inflation rates. 
B)  the larger the amount of taxable income, the higher the rate at which it is taxed. 
C)  tax rates are inversely related to inflation rates. 
D)  everyone pays the same income tax rate. 
E)  no exemptions or deductions are available.

The federal government receives a majority of its revenue from ____ taxes.

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

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. [ Interest | Child support ] received would be reported as taxable income.

Which of the following statements regarding the tax levied under the Federal Insurance Contributions Act (FICA) is true?

Sarah is a homeowner and a single taxpayer. She has owned and occupied the house as a principal residence for the last 8 years. In the current taxable year, she receives a promotion. She sells her home and moves to another area. The capital gain on the sale of the principal residence 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. Interest income from a checking account should be reported on Schedule [ B | F ] of Form 1040.

Ben is 67 years old and single. He is also legally blind. When filing his 2018 income taxes, he opts to take the standard deduction rather than itemizing personal deductions. How much is Ben's standard deduction?

For those under the age of 65, medical and dental expenses may be included as itemized deductions:

Henry is married to Lillian, and they have two dependent children. Both of them want to file their own tax returns, reporting only his or her own income, deductions, and exemptions. The filing status of Henry and Lillian is:

Income shifting refers to the process of transferring income from the taxpayer to the Internal Revenue Service (IRS).

The alternative minimum tax (AMT) is applicable to taxpayers with moderate levels of income only.

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

Peter's tax computed per the tax rate schedule amounts to $2,000, and his tax credits amount to $500. His total tax liability is:

Qualified dividends are taxed at a higher rate than long-term capital gains.

From the following information, determine Marcie's gross income for tax purposes.

When an individual gives his or her child an income-producing asset, he or she is:

A tax credit could result from:

A progressive tax structure is one in which:

Understanding the Financial Planning Process

Developing 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 and Real Estate

Planning for Retirement

Preserving Your Estate

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Exam 3: Preparing Your Taxes

The federal government receives a majority of its revenue from ____ taxes.

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

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. [ Interest | Child support ] received would be reported as taxable income.

Which of the following statements regarding the tax levied under the Federal Insurance Contributions Act (FICA) is true?

Sarah is a homeowner and a single taxpayer. She has owned and occupied the house as a principal residence for the last 8 years. In the current taxable year, she receives a promotion. She sells her home and moves to another area. The capital gain on the sale of the principal residence 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. Interest income from a checking account should be reported on Schedule [ B | F ] of Form 1040.

Ben is 67 years old and single. He is also legally blind. When filing his 2018 income taxes, he opts to take the standard deduction rather than itemizing personal deductions. How much is Ben's standard deduction?

For those under the age of 65, medical and dental expenses may be included as itemized deductions:

Henry is married to Lillian, and they have two dependent children. Both of them want to file their own tax returns, reporting only his or her own income, deductions, and exemptions. The filing status of Henry and Lillian is:

Income shifting refers to the process of transferring income from the taxpayer to the Internal Revenue Service (IRS).

The alternative minimum tax (AMT) is applicable to taxpayers with moderate levels of income only.

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

Peter's tax computed per the tax rate schedule amounts to $2,000, and his tax credits amount to $500. His total tax liability is:

Qualified dividends are taxed at a higher rate than long-term capital gains.

From the following information, determine Marcie's gross income for tax purposes.

When an individual gives his or her child an income-producing asset, he or she is:

A tax credit could result from:

A progressive tax structure is one in which:

Understanding the Financial Planning Process

Developing 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 and Real Estate

Planning for Retirement

Preserving Your Estate

Filters