Exam 4: Tax Planning and Strategies

According to the Tax Policy Center,approximately ________ of American households did not pay any federal income taxes in the 2013 tax year.

FICA deductions from your paycheck are for which mandatory federal insurance programs?

If you're in the 25% marginal tax bracket,what is the equivalent taxable yield on an 10% municipal bond?

The amount of income taxes that you actually pay is based upon your

Leticia is a single person who makes $45,000 per year.This year she paid $2,000 in student loan interest,$1,500 in medical expenses,$7,200 in rent and $4,800 in car loan payments.She contributes $3,600 per year to her 401(k)plan at work.Give her some tax advice.

Claire currently makes $30,000 per year and is in a 15% tax bracket.If she contributes $1,800 to her 401(k)plan at work,by how much will this lower her tax liability?

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

According the Keown book,most taxes-about ________ of individual income taxes-are collected through withholding from wages.

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

Chase Cutter has a marginal tax rate of 33 percent,a state income tax rate of 3.5 percent,and a city income tax rate of 0.5 percent.The tax for Social Security and Medicare is 7.65 percent.What would be the effective marginal tax rate on your last dollar of earnings?

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 2014 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 2014. Gross income $98,712 Student loan interest $1,965 Richard's traditional IRA $1,500 Total itemized deductions $12,000 Standard deduction for 2014 $12,400 Personal exemption amount $3,950 Marginal tax bracket 25% -Richard and Katarina's filing status should be

Which of the methods listed below is not used by the IRS as a tax collection mechanism?

Standard deductions need yearlong record-keeping and thorough and accurate documentation.

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

Karen and her husband, Jeffrey, are facing a new income tax situation this year. She is a corporate accountant and Jeffrey is an engineer. Their gross salaries total $89,000. Both graduated from four-year universities five years ago and are still paying off large student loans. She is now attending school part-time to prepare for the CPA exam. The Bosteins incurred considerable expenses in the process of adopting an infant this year, and they have the ongoing expense of daycare. In January of last year they closed on their new home. Although trained as an accountant, Karen's work has not involved income tax preparation. Help them consider the following questions. -With a growing family,Karen and Jeffrey know they should start investing more to provide for a secure future.Which of the following issues should they consider as they plan?

Explain the concept of using the standard deduction or using itemized deductions.

Craig Ripley sold his stock in Gandy Corporation for a price less than what he paid for it.Craig will experience

Explain how to calculate your taxable income,and how to determine the need for a tax payment or refund.

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

In 2013 you purchased $1,800 of IBM stock and you sold it this year for $1,500.Since you lost money on this transaction,there is no valid reason to include this on this year's tax return.