Question 1

Contributions to a Roth IRA and a Coverdell education savings account are both tax-deductible and earnings accumulate tax-free.

Accepted Answer

A) True 
 B)False

Question 2

Numerous employee benefits are not included in gross income.

Accepted Answer

A) True 
 B)False

Question 3

Anne and Jose Romero are in the 28 percent marginal federal tax bracket.Two years ago they purchased 100 shares of ABC stock for $28 per share,paying commissions of $75.Last week they sold this stock for $35 per share and paid commissions of $50.How much is their taxable capital gain on this investment?

Accepted Answer

A) $825 
B) $700 
C) $575 
D) $196 
A) $825 
B) $700 
C) $575 
D) $196

Question 4

Which is not characteristic of a Coverdell education savings account?

Accepted Answer

A) Contributions are tax deductible. 
B) The maximum yearly contribution is $2,000. 
C) Withdrawals for qualified expenses are tax-free. 
D) Earnings accumulate tax-free. 
A) Contributions are tax deductible. 
B) The maximum yearly contribution is $2,000. 
C) Withdrawals for qualified expenses are tax-free. 
D) Earnings accumulate tax-free.

Question 5

The Affordable Care Act provides that individuals and families may take a tax credit called the?______ to help them purchase health insurance through a health insurance exchange.

Accepted Answer

A) Health insurance tax deduction 
B) Modified Adjusted Gross Income (MAGI) Credit 
C) Health Insurance Premium Tax Credit 
D) American Opportunity Tax Credit 
A) Health insurance tax deduction 
B) Modified Adjusted Gross Income (MAGI) Credit 
C) Health Insurance Premium Tax Credit 
D) American Opportunity Tax Credit

Question 6

Life insurance benefits received are taxable income.

Accepted Answer

A) True 
 B)False

Question 7

If a child is under age 18 and has net investment income exceeding $2,000,the excess is taxed as if it were the income of the parent.

Accepted Answer

A) True 
 B)False

Question 8

Deferring income can achieve the same result as accelerating deductions.

Accepted Answer

A) True 
 B)False

Question 9

Figure 4-1
 
-Refer to Figure 4-1.What is Tony and Liz's taxable income?

Accepted Answer

A) $15,600 
B) $28,000 
C) $35,000 
D) $63,000 
A) $15,600 
B) $28,000 
C) $35,000 
D) $63,000

Question 10

The IRS requires that you have receipts for deducted cash contributions of $250 or more.

Accepted Answer

A) True 
 B)False

Question 11

Tax which applies to income of a minor child earned off the assets is known as the

Accepted Answer

A) kiddie tax. 
B) value-added tax. 
C) consumption tax. 
D) regressive tax. 
A) kiddie tax. 
B) value-added tax. 
C) consumption tax. 
D) regressive tax.

Question 12

A tax credit of up to ____ is available for qualifying costs of an adoption.

Accepted Answer

A) $0 
B) $1,000 
C) $10,000 
D) $13,190 
A) $0 
B) $1,000 
C) $10,000 
D) $13,190

Question 13

Figure 4-1
 
-Refer to Figure 4-1.What is the maximum number of personal exemptions Tony and Liz can take this year?

Accepted Answer

A) Four 
B) Three 
C) Two 
D) One 
A) Four 
B) Three 
C) Two 
D) One

Question 14

Other factors being equal,tax-sheltered income is preferable to tax-free income.

Accepted Answer

A) True 
 B)False

Question 15

IRS Publication 17 provides most of the federal income tax information needed by the typical taxpayer.

Accepted Answer

A) True 
 B)False

Question 16

Iris Rosales is an unmarried college student age 21,and is claimed as a dependent on her married parents' tax return.What is the maximum number of personal exemptions Iris can legally claim on her own tax return?

Accepted Answer

A) 3 
B) 2 
C) 1 
D) 0 
A) 3 
B) 2 
C) 1 
D) 0

Question 17

Which of the following sources of income associated with divorce is (are) reported as part of gross taxable income?

Accepted Answer

A) Property settlement 
B) Child support payments received 
C) Alimony 
D) All of these 
A) Property settlement 
B) Child support payments received 
C) Alimony 
D) All of these

Question 18

The most commonly used defined-contribution plan is the Roth IRA.

Accepted Answer

A) True 
 B)False

Question 19

There are times when you would want to turn down additional income because the additional taxes owed will exceed the extra income received.

Accepted Answer

A) True 
 B)False

Question 20

Ben and Susan Shew,filing jointly,would pay $7,054 in taxes on $53,100 of taxable income.If Ben won $6,000 in the lottery,they would pay $7,954,in taxes.What is the couple's marginal tax rate?

Accepted Answer

A) 10 percent 
B) 15 percent 
C) 25 percent 
D) 28 percent 
A) 10 percent 
B) 15 percent 
C) 25 percent 
D) 28 percent

Contributions to a Roth IRA and a Coverdell education savings account are both tax-deductible and earnings accumulate tax-free.

Numerous employee benefits are not included in gross income.

Which is not characteristic of a Coverdell education savings account?

The Affordable Care Act provides that individuals and families may take a tax credit called the?______ to help them purchase health insurance through a health insurance exchange.

Life insurance benefits received are taxable income.

If a child is under age 18 and has net investment income exceeding $2,000,the excess is taxed as if it were the income of the parent.

Deferring income can achieve the same result as accelerating deductions.

Figure 4-1 -Refer to Figure 4-1.What is Tony and Liz's taxable income?

The IRS requires that you have receipts for deducted cash contributions of $250 or more.

Tax which applies to income of a minor child earned off the assets is known as the

A tax credit of up to ____ is available for qualifying costs of an adoption.

Figure 4-1 -Refer to Figure 4-1.What is the maximum number of personal exemptions Tony and Liz can take this year?

Other factors being equal,tax-sheltered income is preferable to tax-free income.

IRS Publication 17 provides most of the federal income tax information needed by the typical taxpayer.

Iris Rosales is an unmarried college student age 21,and is claimed as a dependent on her married parents' tax return.What is the maximum number of personal exemptions Iris can legally claim on her own tax return?

Which of the following sources of income associated with divorce is (are) reported as part of gross taxable income?

The most commonly used defined-contribution plan is the Roth IRA.

There are times when you would want to turn down additional income because the additional taxes owed will exceed the extra income received.

Ben and Susan Shew,filing jointly,would pay $7,054 in taxes on $53,100 of taxable income.If Ben won $6,000 in the lottery,they would pay $7,954,in taxes.What is the couple's marginal tax rate?

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

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Exam 4: Managing Income Taxes

Contributions to a Roth IRA and a Coverdell education savings account are both tax-deductible and earnings accumulate tax-free.

Numerous employee benefits are not included in gross income.

Which is not characteristic of a Coverdell education savings account?

The Affordable Care Act provides that individuals and families may take a tax credit called the?______ to help them purchase health insurance through a health insurance exchange.

Life insurance benefits received are taxable income.

If a child is under age 18 and has net investment income exceeding $2,000,the excess is taxed as if it were the income of the parent.

Deferring income can achieve the same result as accelerating deductions.

Figure 4-1 -Refer to Figure 4-1.What is Tony and Liz's taxable income?

The IRS requires that you have receipts for deducted cash contributions of $250 or more.

Tax which applies to income of a minor child earned off the assets is known as the

A tax credit of up to ____ is available for qualifying costs of an adoption.

Figure 4-1 -Refer to Figure 4-1.What is the maximum number of personal exemptions Tony and Liz can take this year?

Other factors being equal,tax-sheltered income is preferable to tax-free income.

IRS Publication 17 provides most of the federal income tax information needed by the typical taxpayer.

Iris Rosales is an unmarried college student age 21,and is claimed as a dependent on her married parents' tax return.What is the maximum number of personal exemptions Iris can legally claim on her own tax return?

Which of the following sources of income associated with divorce is (are) reported as part of gross taxable income?

The most commonly used defined-contribution plan is the Roth IRA.

There are times when you would want to turn down additional income because the additional taxes owed will exceed the extra income received.

Ben and Susan Shew,filing jointly,would pay $7,054 in taxes on $53,100 of taxable income.If Ben won $6,000 in the lottery,they would pay $7,954,in taxes.What is the couple's marginal tax rate?

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

Filters