Exam 4: Planning Your Tax Strategy

Elizabeth Gleason just died. At the time of her death the total value of her assets was $150,000. The federal government collected $7,500 in taxes based on this value. What type of tax is this most likely to be?

Which one of the following states does not have a general sales tax?

Michele Walsh is considering an additional charitable contribution of $2,000 to a tax-deductible charity, bringing her total itemized deductions to $16,000. If Michele is in a 28 percent tax bracket, how much will this $2,000 contribution reduce her taxes?

Which one of the following is a retirement plan that allows a $5,000 annual contribution with tax-free earnings after five years?

Many taxpayers with high incomes and high amounts of deductions must pay an additional tax referred to as the ________________ tax.

Joan Sanchez is single and earns $40,000 in taxable income. She uses the following tax rate schedule to calculate the taxes she owes. What is Joan's marginal tax rate?

Kim Ye is single and earns $40,000 in taxable income. He uses the following tax rate schedule to calculate the taxes he owes. Calculate the dollar amount of estimated taxes that Kim owes.

What factors determine whether a taxpayer will use the Form 1040EZ, Form 1040A, or Form 1040?

Which one of the following is a retirement plan sponsored by an employer?

Elaine's Embroidery Emporium which is run out of Elaine's home is visited by an IRS agent who wants to verify the office expenses Elaine claims are valid. What type of IRS audit is this?

Capital gains refer to:

Which type of tax is imposed on specific goods and services at the time of purchase?

An exclusion is earnings not included in taxable income.

A taxpayer with a taxable income of $47,856 and a total tax bill of $5,889 would have an average tax rate of ____ percent.

The ______________ property tax is based on the value of land and buildings at some point in time.

A short-term capital gain is profit earned on an investment that is:

Which one of these statements correctly applies to a Roth IRA?

Exemptions are deductions for yourself, your spouse, and qualified dependents that you can deduct from adjusted gross income.

John Camey goes into a local department store and purchases a new suit. He pays $43 in taxes on this purchase. What type of tax is this most likely to be?

Interest earnings of $1,600 from a taxable investment for a person in a 28 percent tax bracket would result in after-tax earnings of: