Question 1

_____ would be considered a part of your taxable income.

Accepted Answer

A) Your (Individual retirement account)IRA contributions 
B) A gift from your aunt 
C) Your child-support payments 
D) A gain from the sale of your assets 
E) Your tuition scholarship 
A) Your (Individual retirement account)IRA contributions 
B) A gift from your aunt 
C) Your child-support payments 
D) A gain from the sale of your assets 
E) Your tuition scholarship

Question 2

From the information given below,determine Steve's gross income for tax purposes.
 $\begin{array}{c}
\begin{array}{|l|}
\hline
Salary\\hline
\text{Interest (checking account)}\\hline
\text{Cash received as birthday gift}\\hline
\text{Dividends (mutual funds)}\\hline
\text{Child-support payments received from ex-wife}\\hline
\text{Life insurance benefits received after aunt's death}\\hline
\end{array}
\begin{array}{l|}
\hline
\$ 32,000\\hline
\$ 25\\hline
\$ 1,000\\hline
\$ 5,500\\hline
\$24,000\\hline
\$ 50,000\\hline
\end{array}
\end{array}$

Accepted Answer

Steve's gross income

Question 3

In 2015,the total Social Security tax rate was:

Accepted Answer

A) 6.0 percent. 
B) 6.75 percent. 
C) 7.25 percent. 
D) 13.4 percent. 
E) 15.3 percent. 
A) 6.0 percent. 
B) 6.75 percent. 
C) 7.25 percent. 
D) 13.4 percent. 
E) 15.3 percent.

Question 4

Tax ____________ is an illegal practice. ​

Accepted Answer

A) avoidance 
B) planning 
C) evasion 
D) deferring 
A) avoidance 
B) planning 
C) evasion 
D) deferring

Question 5

Payments under the provisions of the Federal Insurance Contributions Act (FICA)are also known as ____________. ​

Accepted Answer

A) income tax 
B) Social Security tax 
C) property tax 
D) capital gains tax 
A) income tax 
B) Social Security tax 
C) property tax 
D) capital gains tax

Question 6

Itemized deductions are listed on:

Accepted Answer

A) Schedule A of Form 1040. 
B) Schedule B of Form 1040. 
C) Schedule C of Form 1040. 
D) Schedule D of Form 1040. 
E) Schedule F of Form 1040. 
A) Schedule A of Form 1040. 
B) Schedule B of Form 1040. 
C) Schedule C of Form 1040. 
D) Schedule D of Form 1040. 
E) Schedule F of Form 1040.

Question 7

A _____ would most likely have to pay estimated taxes.

Accepted Answer

A) school teacher 
B) manager for an industrial firm 
C) self-employed plumber 
D) union worker 
E) corporate attorney 
A) school teacher 
B) manager for an industrial firm 
C) self-employed plumber 
D) union worker 
E) corporate attorney

Question 8

Tax avoidance is legal,whereas tax evasion is illegal.

Accepted Answer

A) True 
 B)False

Question 9

The highest marginal tax rate is currently ____________. ​

Accepted Answer

A) 35.6 percent 
B) 35 percent 
C) 39.6 percent 
D) 41 percent 
A) 35.6 percent 
B) 35 percent 
C) 39.6 percent 
D) 41 percent

Question 10

Qualified dividends are taxed at the highest capital gain rates.

Accepted Answer

A) True 
 B)False

Question 11

Your income tax withholding is dependent on:

Accepted Answer

A) your age and educational qualification. 
B) the number of deductions claimed by your spouse. 
C) your income level and the number of withholding allowances you have claimed. 
D) the number of standard deductions you have claimed. 
E) the number of withholding allowances allowed by your employer. 
A) your age and educational qualification. 
B) the number of deductions claimed by your spouse. 
C) your income level and the number of withholding allowances you have claimed. 
D) the number of standard deductions you have claimed. 
E) the number of withholding allowances allowed by your employer.

Question 12

For those under the age of 65,medical and dental expenses may be included as itemized deductions:

Accepted Answer

A) when they exceed 4% of the adjusted gross income. 
B) up to a maximum of $7,500 per individual per tax year. 
C) only if they do not exceed 7.5% of the gross income. 
D) only for amounts in excess of 10% of the adjusted gross income. 
E) when they exceed 2% of the taxable income. 
A) when they exceed 4% of the adjusted gross income. 
B) up to a maximum of $7,500 per individual per tax year. 
C) only if they do not exceed 7.5% of the gross income. 
D) only for amounts in excess of 10% of the adjusted gross income. 
E) when they exceed 2% of the taxable income.

Question 13

Taxable income is calculated by:

Accepted Answer

A) adding adjustments to and subtracting the larger of itemized or standard deductions and exemptions from gross income. 
B) subtracting adjustments,the larger of itemized or standard deductions,and exemptions from gross income. 
C) adding adjustments,the larger of itemized or standard deductions,and exemptions to gross income. 
D) subtracting adjustments from and adding the larger of itemized or standard deductions and exemptions to gross income. 
E) adding adjustments and the larger of itemized or standard deductions to and subtracting exemptions from gross income. 
A) adding adjustments to and subtracting the larger of itemized or standard deductions and exemptions from gross income. 
B) subtracting adjustments,the larger of itemized or standard deductions,and exemptions from gross income. 
C) adding adjustments,the larger of itemized or standard deductions,and exemptions to gross income. 
D) subtracting adjustments from and adding the larger of itemized or standard deductions and exemptions to gross income. 
E) adding adjustments and the larger of itemized or standard deductions to and subtracting exemptions from gross income.

Question 14

The _____ income is gross income less the tax deductions and payments for insurance and retirement savings.

Accepted Answer

A) take-home 
B) EBIT 
C) adjusted gross 
D) taxable 
E) tax-exempt 
A) take-home 
B) EBIT 
C) adjusted gross 
D) taxable 
E) tax-exempt

Question 15

Sue and Tim are married taxpayers in the 33% marginal tax bracket.In 2015,they sold common stock shares,which they held for more than 40 months,for a capital gain of $3,800.They also sold some technology stock for a long-term capital loss of $9,000.In addition,they sold the home they had lived in for the past 10 years and experienced a $75,000 gain on the house.How much will their net capital gains (or losses)be for 2015? How much will they pay (or save)in taxes as a result of these transactions?

Accepted Answer

The net loss is $5,200 ($9,000 - $3,800)

Question 16

Adjustments to gross income will decrease your taxable income.

Accepted Answer

A) True 
 B)False

Question 17

When an individual gives his or her child an income-producing asset,he or she is ____________. ​

Accepted Answer

A) shifting his or her income 
B) maximizing his or her deductions 
C) deferring his or her tax 
D) executing his or her will 
A) shifting his or her income 
B) maximizing his or her deductions 
C) deferring his or her tax 
D) executing his or her will

Question 18

Dwayne and Gayle were divorced on September 29.They have not remarried since and have no dependents.Their filing status for the year will be married filing separately since they were married for more than half of the year.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is true about enrolled agents?

Accepted Answer

A) They are tax professionals who advise only professionals in tax planning. 
B) They are taxpayers with relatively common types of income and expenditure. 
C) They are federally licensed individual tax practitioners. 
D) They are lawyers who specialize in tax planning. 
E) They are federal agents who collect taxes from taxpayers. 
A) They are tax professionals who advise only professionals in tax planning. 
B) They are taxpayers with relatively common types of income and expenditure. 
C) They are federally licensed individual tax practitioners. 
D) They are lawyers who specialize in tax planning. 
E) They are federal agents who collect taxes from taxpayers.

Question 20

Shawn earns $65,000.If the total Social Security tax rate is 15.3%,then how much is his Social Security tax? How much does his employer pay toward Social Security taxes for Shawn? (Show all work.)

Accepted Answer

Alex's Social Security tax = [

_____ would be considered a part of your taxable income.

In 2015,the total Social Security tax rate was:

Tax ____________ is an illegal practice.

Payments under the provisions of the Federal Insurance Contributions Act (FICA)are also known as ____________.

Itemized deductions are listed on:

A _____ would most likely have to pay estimated taxes.

Tax avoidance is legal,whereas tax evasion is illegal.

The highest marginal tax rate is currently ____________.

Qualified dividends are taxed at the highest capital gain rates.

Your income tax withholding is dependent on:

For those under the age of 65,medical and dental expenses may be included as itemized deductions:

Taxable income is calculated by:

The _____ income is gross income less the tax deductions and payments for insurance and retirement savings.

Adjustments to gross income will decrease your taxable income.

When an individual gives his or her child an income-producing asset,he or she is ____________.

Dwayne and Gayle were divorced on September 29.They have not remarried since and have no dependents.Their filing status for the year will be married filing separately since they were married for more than half of the year.

Which of the following is true about enrolled agents?

Shawn earns $65,000.If the total Social Security tax rate is 15.3%,then how much is his Social Security tax? How much does his employer pay toward Social Security taxes for Shawn? (Show all work.)

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, ETFS and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 3: Preparing Your Taxes

_____ would be considered a part of your taxable income.

In 2015,the total Social Security tax rate was:

Tax ____________ is an illegal practice. ​

Payments under the provisions of the Federal Insurance Contributions Act (FICA)are also known as ____________. ​

Itemized deductions are listed on:

A _____ would most likely have to pay estimated taxes.

Tax avoidance is legal,whereas tax evasion is illegal.

The highest marginal tax rate is currently ____________. ​

Qualified dividends are taxed at the highest capital gain rates.

Your income tax withholding is dependent on:

For those under the age of 65,medical and dental expenses may be included as itemized deductions:

Taxable income is calculated by:

The _____ income is gross income less the tax deductions and payments for insurance and retirement savings.

Adjustments to gross income will decrease your taxable income.

When an individual gives his or her child an income-producing asset,he or she is ____________. ​

Dwayne and Gayle were divorced on September 29.They have not remarried since and have no dependents.Their filing status for the year will be married filing separately since they were married for more than half of the year.

Which of the following is true about enrolled agents?

Shawn earns $65,000.If the total Social Security tax rate is 15.3%,then how much is his Social Security tax? How much does his employer pay toward Social Security taxes for Shawn? (Show all work.)

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, ETFS and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Tax ____________ is an illegal practice.

Payments under the provisions of the Federal Insurance Contributions Act (FICA)are also known as ____________.

The highest marginal tax rate is currently ____________.

When an individual gives his or her child an income-producing asset,he or she is ____________.