Exam 4: Planning Your Tax Strategy

Haley Thomas has adjusted gross income of $40,000. She paid $3,600 in property taxes during the year. How much of the tax can she deduct from adjusted gross income?

Alex Bates goes on Jeopardy and earns $875,000 in winnings. What type of income is this?

A taxpayer whose spouse recently died is most likely to use the ____________ filing status.

Tax-deferred retirement plans are a type of:

Thomas Franklin claimed an additional $3,000 in deductions he knowingly knew he did not qualify for so he could reduce his tax bill. This is referred to as tax:

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

Mike Hansen has adjusted gross income of $28,000. During the year, Mike decided he needed a larger home. He purchased a home on a golf course in the same town as his first home. Mike incurred $7,500 in moving expenses. How much of this can he deduct from adjusted gross income?

Explain the difference between a short-term capital gain and a long-term capital gain.

Randal Ice is 57 years old, and has adjusted gross income of $32,000. He has medical expenses for the year of $6,000. How much of these expenses can he deduct from adjusted gross income?

Which of the following good(s) or service(s) are subject to an excise tax?

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

_____________ are expenses that a taxpayer is allowed to deduct from adjusted gross income.

George Washburn had earnings from his salary of $34,000, interest on savings of $800, a contribution to a traditional individual retirement account of $1,500, and dividends from mutual funds of $600. George's adjusted income (AGI) would be:

Money received in the form of dividends or interest is commonly called "earned income."

Which of the following would qualify a person for an exemption when computing taxable income?

Money received in the form of dividends or interest is commonly called:

Cameron Nelson wants to complete his own federal income tax return. He has several questions about the tax form to use and what items should be reported as income. What sources of assistance would you recommend for Cameron?

Taxes are only considered as financial planning activities in April.

Mary Watson bought 20 shares of stock one and half years ago. She recently sold her stock making a profit of $1,400. She is in the 28% tax bracket. Her tax on this investment is:

Drew Davis earns $4,500 per month from his job at Cisco Systems; $900 is withheld from this amount each month for taxes. What type of tax is this most likely to be?