Exam 4: Tax Planning and Strategies

Deductions calculated using the federal tax form "Schedule A" which are totaled and then subtracted from taxable income are called ________.

For the Taylors, in chapter 4, they are allowed to take a tax credit of $1,000 per dependent child off of their ________.

Bracket creep refers to an increase in marginal taxes caused by the impact of inflation.

What are the five general tax strategies in tax planning?

If you're in the 15% marginal tax bracket, what is the equivalent taxable yield on an 8% municipal bond?

Gross income is another name for ________ income.

The impact of taxes are an important consideration in most of the financial decisions that you will make.

Your dependent is claimed as an approved exemption on ________ tax return.

The Federal Insurance Contributions Act (FICA) tax deducted from your salary goes to pay for unemployment insurance.

For most tax payers, their average tax rate is lower than their marginal tax rate.

Although Richard and Katarina are a happily married couple, they joke that they could not possibly remarry for at least two years following the year of the death of the other spouse because

Which of the following are permissible itemized tax deductions?

Assets you own, including such items as stocks, bonds, or real estate, are commonly termed ________.

The deadline to file your income tax return is ________ although an automatic extension may be filed.

Katarina and Richard are a busy young couple with a son, Caleb, who is 6 and twin daughters, Stacy and Casey, who are actively exploring the world as four-year-olds. Before the twins were born, Katarina and Richard bought their first home with plenty of indoor and outdoor space for a growing young family. The Bajorshiks are concerned about their 2011 tax issues, but they are also committed to planning for the future of their family. Next year Richard should be able to pay off the remaining balance of his law school student loans. Contributing to Richard's Roth IRA is an annual priority. The following information reflects tax year 2011. Gross income $98,712 Student loan interest $1,965 Katarina's traditional IRA $1,500 Total itemized deductions $14,987 Standard deduction for 2011 $11,600 Personal exemption amount $3,700 Marginal tax bracket 25% -What is Richard and Katarina's taxable income?

Bang Nguyen recently graduated from college and started working in a good job. He has a little money invested in a stock that pays no dividends. He lives in an apartment, is single, and has no dependents. He has a $22,000 student loan balance and he paid $600 interest in 2011. He is considering going back to school part-time for some additional computer classes. He does not have a personal IRA and he contributed 2% of his $38,750 salary to his 401K plan at work for 2011. He is just completing his tax return for 2011. Based on the information below, answer the following questions. -Based on Bang's completed tax return, what advice would you give him to lower his tax liability for 2012?

Katarina worked as an ER nurse, and knows that demand for the job is high. However, prior to returning to work, when the twins enter kindergarten, she will need to take classes on the latest technological advancements. Which of the following tax planning strategies should the Bajorshiks consider as they plan their financial future?

The earned income credit serves as a negative income tax and is available to

In chapter 4, Dianne Taylor won a 2011 Honda Accord on "The Price is Right" TV show. She has to pay taxes on her prize. The taxes are based on the car's ________ value.

Katarina and Richard are a busy young couple with a son, Caleb, who is 6 and twin daughters, Stacy and Casey, who are actively exploring the world as four-year-olds. Before the twins were born, Katarina and Richard bought their first home with plenty of indoor and outdoor space for a growing young family. The Bajorshiks are concerned about their 2011 tax issues, but they are also committed to planning for the future of their family. Next year Richard should be able to pay off the remaining balance of his law school student loans. Contributing to Richard's Roth IRA is an annual priority. The following information reflects tax year 2011. Gross income $98,712 Student loan interest $1,965 Katarina's traditional IRA $1,500 Total itemized deductions $14,987 Standard deduction for 2011 $11,600 Personal exemption amount $3,700 Marginal tax bracket 25% -Approximately how much will the Bajorshiks save in 2011 income tax payments as a result of Richard's student loan interest?