Question 1

All gambling winnings are subject to federal income taxation.

Accepted Answer

A) True 
 B)False

Question 2

You can file an amended tax return to obtain deserved refunds for the previous five years.

Accepted Answer

A) True 
 B)False

Question 3

Melissa and Martin McArthur incurred the following interest expenditures:

Accepted Answer

A) $7,425 
B) $5,540 
C) $6,000 
D) $4,700 
A) $7,425 
B) $5,540 
C) $6,000 
D) $4,700

Question 4

To claim an earned income credit,one must have a child.

Accepted Answer

A) True 
 B)False

Question 5

Marla and Victor Zapata have the following eligible miscellaneous itemized deductions:
​
 
They have an adjusted gross income of $63,000 and other itemized deductions of $8,580.How much of the above miscellaneous expenses can they add to their other itemized deductions?

Accepted Answer

A) $4,966 
B) $3,706 
C) $2,020 
D) $0 
A) $4,966 
B) $3,706 
C) $2,020 
D) $0

Question 6

____ cannot be deducted as an adjustment to income.

Accepted Answer

A) The amount contributed to an individual retirement account (IR
A)  
B) Job-related moving expenses 
C) Student loan interest for higher education 
D) State income taxes paid 
A) The amount contributed to an individual retirement account (IR
A)  
B) Job-related moving expenses 
C) Student loan interest for higher education 
D) State income taxes paid

Question 7

A donation of old toys and clothes to the Salvation Army valued at $500 will save a single taxpayer in the 33 percent marginal tax bracket

Accepted Answer

A) $500 if he or she has other itemized deductions of at least $6,200. 
B) $500 if he or she has other itemized deductions of at least $12,400. 
C) $165 if he or she has other itemized deductions of at least $6,200. 
D) $165 if he or she has other itemized deductions of at least $12,400. 
A) $500 if he or she has other itemized deductions of at least $6,200. 
B) $500 if he or she has other itemized deductions of at least $12,400. 
C) $165 if he or she has other itemized deductions of at least $6,200. 
D) $165 if he or she has other itemized deductions of at least $12,400.

Question 8

Personal income taxes are paid on all of your income.

Accepted Answer

A) True 
 B)False

Question 9

The practice in which any unspent dollars in a Flexible Spending Account (FSA) at the end of the year are forfeited and not returned to the employee is known as the

Accepted Answer

A) use-it-or-lose-it rule. 
B) defined-contribution retirement plan. 
C) situation of taxes paid out. 
D) expense reimbursement account. 
A) use-it-or-lose-it rule. 
B) defined-contribution retirement plan. 
C) situation of taxes paid out. 
D) expense reimbursement account.

Question 10

Marc is a university student seeking a degree in international business.He has received a scholarship for $6,000.This income was used as follows:
 
How much of the $6,000 is included in gross income?

Accepted Answer

A) $6,000 
B) $2,400 
C) $3,600 
D) $0 
A) $6,000 
B) $2,400 
C) $3,600 
D) $0

Question 11

Practically everything you receive in return for your work or services and any profit from the sale of assets is considered income,whether the compensation is paid in cash,property,or services.Listing these earnings will reveal your

Accepted Answer

A) total income. 
B) taxable income. 
C) gross income. 
D) capital gains. 
A) total income. 
B) taxable income. 
C) gross income. 
D) capital gains.

Question 12

Tax-sheltering for which of the following types of expenses cannot be had through a type of FSA?

Accepted Answer

A) Physician expenses 
B) Dependent care 
C) Prescription drugs 
D) Life insurance premiums 
A) Physician expenses 
B) Dependent care 
C) Prescription drugs 
D) Life insurance premiums

Question 13

Student loan interest paid may be taken as an itemized deduction.

Accepted Answer

A) True 
 B)False

Question 14

Figure 4-1
 
-Refer to Figure 4-1.Approximately how much will Tony and Liz save in taxes as a result of their IRA contributions?

Accepted Answer

A) $150 
B) $450 
C) $1,000 
D) $3,000 
A) $150 
B) $450 
C) $1,000 
D) $3,000

Question 15

The penalty for tax evasion can include

Accepted Answer

A) jail sentences. 
B) penalties. 
C) interest charges. 
D) all of these. 
A) jail sentences. 
B) penalties. 
C) interest charges. 
D) all of these.

Question 16

A(n) ____ is an IRS-approved retirement plan sponsored by an employer to which employees may make pretax contributions that lower their tax liability.

Accepted Answer

A) tax-sheltered investment 
B) defined-contribution retirement plan 
C) pretax income 
D) opportunity cost 
A) tax-sheltered investment 
B) defined-contribution retirement plan 
C) pretax income 
D) opportunity cost

Question 17

High-income households who have sufficient adjustments,deductions and credits to reduce their income tax liability to low levels may instead be subject to the ______ so that they pay a more appropriate level of taxes based on their gross income.

Accepted Answer

A) alternative-minimum tax 
B) value-added tax 
C) progressive adjusted tax 
D) gross adjusted tax 
A) alternative-minimum tax 
B) value-added tax 
C) progressive adjusted tax 
D) gross adjusted tax

Question 18

Which of the following job-related apparel is most likely to qualify as a deductible expense?

Accepted Answer

A) Men's business suit for a bank executive 
B) Jogging suit for a PE teacher 
C) Safety goggles for a welder 
D) Woman's dress for a retail buyer 
A) Men's business suit for a bank executive 
B) Jogging suit for a PE teacher 
C) Safety goggles for a welder 
D) Woman's dress for a retail buyer

Question 19

Personal income taxes are paid only on your taxable income.

Accepted Answer

A) True 
 B)False

Question 20

A short-term capital gain (or loss) occurs when the asset is held for one year or less.

Accepted Answer

A) True 
 B)False

All gambling winnings are subject to federal income taxation.

You can file an amended tax return to obtain deserved refunds for the previous five years.

Melissa and Martin McArthur incurred the following interest expenditures:

To claim an earned income credit,one must have a child.

Marla and Victor Zapata have the following eligible miscellaneous itemized deductions: They have an adjusted gross income of $63,000 and other itemized deductions of $8,580.How much of the above miscellaneous expenses can they add to their other itemized deductions?

____ cannot be deducted as an adjustment to income.

A donation of old toys and clothes to the Salvation Army valued at $500 will save a single taxpayer in the 33 percent marginal tax bracket

Personal income taxes are paid on all of your income.

The practice in which any unspent dollars in a Flexible Spending Account (FSA) at the end of the year are forfeited and not returned to the employee is known as the

Marc is a university student seeking a degree in international business.He has received a scholarship for $6,000.This income was used as follows: How much of the $6,000 is included in gross income?

Practically everything you receive in return for your work or services and any profit from the sale of assets is considered income,whether the compensation is paid in cash,property,or services.Listing these earnings will reveal your

Tax-sheltering for which of the following types of expenses cannot be had through a type of FSA?

Student loan interest paid may be taken as an itemized deduction.

Figure 4-1 -Refer to Figure 4-1.Approximately how much will Tony and Liz save in taxes as a result of their IRA contributions?

The penalty for tax evasion can include

A(n) ____ is an IRS-approved retirement plan sponsored by an employer to which employees may make pretax contributions that lower their tax liability.

High-income households who have sufficient adjustments,deductions and credits to reduce their income tax liability to low levels may instead be subject to the ______ so that they pay a more appropriate level of taxes based on their gross income.

Which of the following job-related apparel is most likely to qualify as a deductible expense?

Personal income taxes are paid only on your taxable income.

A short-term capital gain (or loss) occurs when the asset is held for one year or less.

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

Exam 4: Managing Income Taxes

All gambling winnings are subject to federal income taxation.

You can file an amended tax return to obtain deserved refunds for the previous five years.

Melissa and Martin McArthur incurred the following interest expenditures:

To claim an earned income credit,one must have a child.

Marla and Victor Zapata have the following eligible miscellaneous itemized deductions: ​ They have an adjusted gross income of $63,000 and other itemized deductions of $8,580.How much of the above miscellaneous expenses can they add to their other itemized deductions?

____ cannot be deducted as an adjustment to income.

A donation of old toys and clothes to the Salvation Army valued at $500 will save a single taxpayer in the 33 percent marginal tax bracket

Personal income taxes are paid on all of your income.

The practice in which any unspent dollars in a Flexible Spending Account (FSA) at the end of the year are forfeited and not returned to the employee is known as the

Marc is a university student seeking a degree in international business.He has received a scholarship for $6,000.This income was used as follows: How much of the $6,000 is included in gross income?

Practically everything you receive in return for your work or services and any profit from the sale of assets is considered income,whether the compensation is paid in cash,property,or services.Listing these earnings will reveal your

Tax-sheltering for which of the following types of expenses cannot be had through a type of FSA?

Student loan interest paid may be taken as an itemized deduction.

Figure 4-1 -Refer to Figure 4-1.Approximately how much will Tony and Liz save in taxes as a result of their IRA contributions?

The penalty for tax evasion can include

A(n) ____ is an IRS-approved retirement plan sponsored by an employer to which employees may make pretax contributions that lower their tax liability.

High-income households who have sufficient adjustments,deductions and credits to reduce their income tax liability to low levels may instead be subject to the ______ so that they pay a more appropriate level of taxes based on their gross income.

Which of the following job-related apparel is most likely to qualify as a deductible expense?

Personal income taxes are paid only on your taxable income.

A short-term capital gain (or loss) occurs when the asset is held for one year or less.

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

Marla and Victor Zapata have the following eligible miscellaneous itemized deductions: They have an adjusted gross income of $63,000 and other itemized deductions of $8,580.How much of the above miscellaneous expenses can they add to their other itemized deductions?