Exam 4: Planning Your Tax Strategy

Capital gains refer to profits from the sale of investments.

A tax ____________ is an amount subtracted directly from the amount of taxes owed.

Kelly Vernon wants her tax return prepared by a government approved tax expert. Which of the following tax preparers should Kelly use?

What kind of audit requires that a taxpayer visit an IRS office to clarify some aspect of his or her tax return?

For a dependent to qualify as an exemption, he or she must:

Itemized deductions are recorded on:

A person with a total tax liability of $4,350 and withholding of federal taxes of $3,975 would:

Which of the following would result in a reduction of taxable income?

Which one of the following items is a set amount of income on which no taxes are paid?

Money received by an individual for personal effort is classified as ______________ income.

Which one of the following is not included in gross income?

An expense that would be included in the itemized deductions of a taxpayer is:

A traditional IRA, Keogh plan, and 401(k) plan are examples of:

What are the advantages of a 401K?

The state of Oklahoma imposes a tax of $.17 per gallon on gasoline. What type of tax is this most likely to be?

Which of the following is a major source of revenue for local governments?

The Form 1040 is most helpful to a person who:

Which one of these terms is defined as the use of legitimate methods to reduce one's taxes?

Real-estate property taxes are a major source of revenue for local governments.

Not included in the recent tax credits is a/an _______________ tax credit.