Question 1

One of the legitimate methods to reduce one's taxes is tax evasion

Accepted Answer

A) True 
 B)False

Question 2

Money received by an individual for personal effort is ____________ income.

Accepted Answer

A) earned or employment investment 
B) investment 
C) portfolio 
D) excluded 
E) capital gains 
A) earned or employment investment 
B) investment 
C) portfolio 
D) excluded 
E) capital gains

Question 3

An example of a tax-exempt investment is

Accepted Answer

A) interest on Canada savings bonds. 
B) dividends from corporate stock. 
C) a gain on the sale of your home. 
D) earnings from a mutual fund. 
E) interest on corporate bonds. 
A) interest on Canada savings bonds. 
B) dividends from corporate stock. 
C) a gain on the sale of your home. 
D) earnings from a mutual fund. 
E) interest on corporate bonds.

Question 4

What is step 5 in computing taxable income and your tax liability?

Accepted Answer

A) Determine total income 
B) Calculate net income 
C) Calculating taxable income 
D) Calculate federal taxes owing 
E) Calculating Net Federal Taxes 
A) Determine total income 
B) Calculate net income 
C) Calculating taxable income 
D) Calculate federal taxes owing 
E) Calculating Net Federal Taxes

Question 5

What is step 2 in computing taxable income and your tax liability?

Accepted Answer

A) Determine total income 
B) Calculate net income 
C) Calculating taxable income 
D) Calculate federal taxes owing 
E) Calculating Net Federal Taxes 
A) Determine total income 
B) Calculate net income 
C) Calculating taxable income 
D) Calculate federal taxes owing 
E) Calculating Net Federal Taxes

Question 6

Reductions from gross income for such items as registered retirement account contributions and RESP payments will result in

Accepted Answer

A) business income 
B) taxable income. 
C) earned income. 
D) net income. 
E) total exclusions. 
A) business income 
B) taxable income. 
C) earned income. 
D) net income. 
E) total exclusions.

Question 7

Winning the lottery affects a person's tax situation by

Accepted Answer

A) increasing the standard deduction. 
B) increasing the taxpayer's marginal tax rate. 
C) decreasing itemized deductions. 
D) increasing tax-exempt income. 
E) having no influence at all on taxable income. 
A) increasing the standard deduction. 
B) increasing the taxpayer's marginal tax rate. 
C) decreasing itemized deductions. 
D) increasing tax-exempt income. 
E) having no influence at all on taxable income.

Question 8

Taxable income is the total earnings of a person.

Accepted Answer

A) True 
 B)False

Question 9

Income from property, includes income in the form of interest, dividends, and rental income net of expenses.

Accepted Answer

A) Employment 
B) Net business 
C) Investment 
D) Capital gains 
E) Other 
A) Employment 
B) Net business 
C) Investment 
D) Capital gains 
E) Other

Question 10

A field audit requires that a taxpayer visit an auditing agent to clarify some aspect of his or her tax return.

Accepted Answer

A) True 
 B)False

Question 11

Remuneration received for personal effort, including salaries, wages, commissions, tips, bonuses, and taxable employee benefits is classified as what type of income?

Accepted Answer

A) Employment 
B) Net business 
C) Investment 
D) Capital gains 
E) Other 
A) Employment 
B) Net business 
C) Investment 
D) Capital gains 
E) Other

Question 12

Contributions to a Tax Free Savings Account are tax deductible

Accepted Answer

A) True 
 B)False

Question 13

To help you cope with taxes, common goals related to tax planning include all the following except:

Accepted Answer

A) Knowing the current tax laws and regulations that affect you 
B) Maintaining complete and appropriate tax records. 
C) Making employment and purchase decisions that leave you with the greatest after-tax cash flows and net wealth 
D) Making investment decisions that leave you with the greatest after-tax cash flows and net wealth 
E) Minimizing taxes 
A) Knowing the current tax laws and regulations that affect you 
B) Maintaining complete and appropriate tax records. 
C) Making employment and purchase decisions that leave you with the greatest after-tax cash flows and net wealth 
D) Making investment decisions that leave you with the greatest after-tax cash flows and net wealth 
E) Minimizing taxes

Question 14

Contributing $2,000 to an RRSP changes the Tax Free Savings Account (TFSA) contribution by

Accepted Answer

A) reducing the limit by $1,000 
B) reducing the limit by $2,000 
C) reducing the limit by $3,000 
D) does not reduce the TFSA contribution limit 
E) Increases the TFSA limit by $2,000 
A) reducing the limit by $1,000 
B) reducing the limit by $2,000 
C) reducing the limit by $3,000 
D) does not reduce the TFSA contribution limit 
E) Increases the TFSA limit by $2,000

Question 15

What is the most common type of tax filing error, of those listed?

Accepted Answer

A) Mathematical errors, such as adding or subtracting amounts incorrectly. 
B) Calculating and claiming provincial tax credits incorrectly. 
C) Claiming GST/HST credits incorrectly by using incorrect spousal income amounts. 
D) Claiming incorrect amounts as RRSP contributions. 
E) Forgetting to claim the age amount, or claiming it incorrectly. 
A) Mathematical errors, such as adding or subtracting amounts incorrectly. 
B) Calculating and claiming provincial tax credits incorrectly. 
C) Claiming GST/HST credits incorrectly by using incorrect spousal income amounts. 
D) Claiming incorrect amounts as RRSP contributions. 
E) Forgetting to claim the age amount, or claiming it incorrectly.

Question 16

A tax credit of $50 for a person in a 28 percent tax bracket would reduce a person's taxes by

Accepted Answer

A) $10. 
B) $28. 
C) $14. 
D) $50. 
E) $35. 
A) $10. 
B) $28. 
C) $14. 
D) $50. 
E) $35.

Question 17

Beginning in 2009 Canadian residents 18 and older are allowed to contribute _________ per year to a Tax Free Savings Account:

Accepted Answer

A) $1,000 
B) $2,000 
C) $3,000 
D) $4,000 
E) $5,000 
A) $1,000 
B) $2,000 
C) $3,000 
D) $4,000 
E) $5,000

Question 18

Making use of legitimate methods to reduce one's taxes is called tax ____________.

Accepted Answer

A) evasion 
B) planning 
C) exemptions 
D) deferred techniques 
E) reductions 
A) evasion 
B) planning 
C) exemptions 
D) deferred techniques 
E) reductions

Question 19

Which type of tax expert would be of most value when you have a difference of opinion with the tax department?

Accepted Answer

A) an enrolled agent 
B) a nationally-chartered tax preparer 
C) a CA 
D) a tax accountant 
E) a tax attorney 
A) an enrolled agent 
B) a nationally-chartered tax preparer 
C) a CA 
D) a tax accountant 
E) a tax attorney

Question 20

What is the marginal federal tax rate as of 2016 for an income of $125,000

Accepted Answer

A) 15% 
B) 20.5% 
C) 26% 
D) 29% 
E) 33% 
A) 15% 
B) 20.5% 
C) 26% 
D) 29% 
E) 33%

One of the legitimate methods to reduce one's taxes is tax evasion

Money received by an individual for personal effort is ____________ income.

An example of a tax-exempt investment is

What is step 5 in computing taxable income and your tax liability?

What is step 2 in computing taxable income and your tax liability?

Reductions from gross income for such items as registered retirement account contributions and RESP payments will result in

Winning the lottery affects a person's tax situation by

Taxable income is the total earnings of a person.

Income from property, includes income in the form of interest, dividends, and rental income net of expenses.

A field audit requires that a taxpayer visit an auditing agent to clarify some aspect of his or her tax return.

Remuneration received for personal effort, including salaries, wages, commissions, tips, bonuses, and taxable employee benefits is classified as what type of income?

Contributions to a Tax Free Savings Account are tax deductible

To help you cope with taxes, common goals related to tax planning include all the following except:

Contributing $2,000 to an RRSP changes the Tax Free Savings Account (TFSA) contribution by

What is the most common type of tax filing error, of those listed?

A tax credit of $50 for a person in a 28 percent tax bracket would reduce a person's taxes by

Beginning in 2009 Canadian residents 18 and older are allowed to contribute _________ per year to a Tax Free Savings Account:

Making use of legitimate methods to reduce one's taxes is called tax ____________.

Which type of tax expert would be of most value when you have a difference of opinion with the tax department?

What is the marginal federal tax rate as of 2016 for an income of $125,000

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters

Exam 3: Planning Your Tax Strategy

One of the legitimate methods to reduce one's taxes is tax evasion

Money received by an individual for personal effort is ____________ income.

An example of a tax-exempt investment is

What is step 5 in computing taxable income and your tax liability?

What is step 2 in computing taxable income and your tax liability?

Reductions from gross income for such items as registered retirement account contributions and RESP payments will result in

Winning the lottery affects a person's tax situation by

Taxable income is the total earnings of a person.

Income from property, includes income in the form of interest, dividends, and rental income net of expenses.

A field audit requires that a taxpayer visit an auditing agent to clarify some aspect of his or her tax return.

Remuneration received for personal effort, including salaries, wages, commissions, tips, bonuses, and taxable employee benefits is classified as what type of income?

Contributions to a Tax Free Savings Account are tax deductible

To help you cope with taxes, common goals related to tax planning include all the following except:

Contributing $2,000 to an RRSP changes the Tax Free Savings Account (TFSA) contribution by

What is the most common type of tax filing error, of those listed?

A tax credit of $50 for a person in a 28 percent tax bracket would reduce a person's taxes by

Beginning in 2009 Canadian residents 18 and older are allowed to contribute _________ per year to a Tax Free Savings Account:

Making use of legitimate methods to reduce one's taxes is called tax ____________.

Which type of tax expert would be of most value when you have a difference of opinion with the tax department?

What is the marginal federal tax rate as of 2016 for an income of $125,000

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters