Question 1

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?

Accepted Answer

A) General sales tax 
B) Excise tax 
C) Personal property tax 
D) Income tax 
E) Estate tax 
A) General sales tax 
B) Excise tax 
C) Personal property tax 
D) Income tax 
E) Estate tax

Question 2

Capital gains refer to profits from the sale of stocks,bonds,or real estate.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) Roth IRA 
B) Education IRA 
C) Keogh Account 
D) 401 Plan 
E) Traditional IRA 
A) Roth IRA 
B) Education IRA 
C) Keogh Account 
D) 401 Plan 
E) Traditional IRA

Question 4

Which statement is true regarding a tax credit?

Accepted Answer

A) A tax credit is the same as a tax deduction. 
B) A tax credit reduces the amount of taxes owed. 
C) Medical expenses is an example of a tax credit. 
D) A tax credit reduces taxable income. 
E) None of these are true. 
A) A tax credit is the same as a tax deduction. 
B) A tax credit reduces the amount of taxes owed. 
C) Medical expenses is an example of a tax credit. 
D) A tax credit reduces taxable income. 
E) None of these are true.

Question 5

A drawback of Flexible Spending Accounts is that any account funds must be used to pay for expenses incurred before year's end or the money is lost.

Accepted Answer

A) True 
 B)False

Question 6

An exclusion affects a person's taxes by:

Accepted Answer

A) reducing the amount of gross income. 
B) increasing itemized deductions. 
C) decreasing itemized deductions. 
D) decreasing the number of exemptions a person can claim. 
E) increasing the number of exemptions a person can claim. 
A) reducing the amount of gross income. 
B) increasing itemized deductions. 
C) decreasing itemized deductions. 
D) decreasing the number of exemptions a person can claim. 
E) increasing the number of exemptions a person can claim.

Question 7

Why would tax-exempt income provide greater short-term financial benefits than tax-deferred income?

Accepted Answer

Tax exempt income is not taxed

Question 8

When a taxpayer's income increases $1,000 and the taxes owed increases from $7,867 to $8,177,the marginal tax rate is ______ percent.

Accepted Answer

A) 15 
B) 20 
C) 25 
D) 28 
E) 31 
A) 15 
B) 20 
C) 25 
D) 28 
E) 31

Question 9

An estate tax is imposed on the value of an individual's property at the time of his or her death.

Accepted Answer

A) True 
 B)False

Question 10

An office audit requires that a taxpayer visit an IRS office to clarify some aspect of his or her tax return.

Accepted Answer

A) True 
 B)False

Question 11

Earned income is money received from:

Accepted Answer

A) dividends. 
B) interest. 
C) wages. 
D) rent from investments. 
E) All of these 
A) dividends. 
B) interest. 
C) wages. 
D) rent from investments. 
E) All of these

Question 12

Which of the following good or service is subject to an excise tax?

Accepted Answer

A) Gasoline 
B) Tires 
C) Cigarettes 
D) Air travel 
E) All of these 
A) Gasoline 
B) Tires 
C) Cigarettes 
D) Air travel 
E) All of these

Question 13

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

Accepted Answer

A) Mortgage interest 
B) A tax shelter 
C) A dependent 
D) Charitable contributions 
E) Passive income 
A) Mortgage interest 
B) A tax shelter 
C) A dependent 
D) Charitable contributions 
E) Passive income

Question 14

An exclusion is earnings not included in gross income.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) Office audit 
B) Correspondence audit 
C) Field audit 
D) Taxpayer compliance measurement program audit 
E) Random audit 
A) Office audit 
B) Correspondence audit 
C) Field audit 
D) Taxpayer compliance measurement program audit 
E) Random audit

Question 16

Which one of the following is included in gross income?

Accepted Answer

A) Tax credit 
B) Exemption 
C) Exclusion 
D) Earned income 
E) Tax deduction 
A) Tax credit 
B) Exemption 
C) Exclusion 
D) Earned income 
E) Tax deduction

Question 17

Mary Watson bought 20 shares of stock one and a 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:

Accepted Answer

A) $140. 
B) $210. 
C) $280. 
D) $392. 
E) $462. 
A) $140. 
B) $210. 
C) $280. 
D) $392. 
E) $462.

Question 18

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:

Accepted Answer

A) $1,600 
B) $1,152 
C) $1,100 
D) $448 
E) $152 
A) $1,600 
B) $1,152 
C) $1,100 
D) $448 
E) $152

Question 19

A $2,000 deposit to a tax-deferred individual retirement account (IRA)for a person in a 25 percent tax bracket would result in a reduced tax bill of:

Accepted Answer

A) $2,000 
B) $1,500 
C) $1,200 
D) $500 
E) $300 
A) $2,000 
B) $1,500 
C) $1,200 
D) $500 
E) $300

Question 20

An exemption 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) reducing the taxpayer's taxable income. 
E) decreasing tax credits. 
A) increasing the standard deduction. 
B) increasing the taxpayer's marginal tax rate. 
C) decreasing itemized deductions. 
D) reducing the taxpayer's taxable income. 
E) decreasing tax credits.

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?

Capital gains refer to profits from the sale of stocks,bonds,or real estate.

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

Which statement is true regarding a tax credit?

A drawback of Flexible Spending Accounts is that any account funds must be used to pay for expenses incurred before year's end or the money is lost.

An exclusion affects a person's taxes by:

Why would tax-exempt income provide greater short-term financial benefits than tax-deferred income?

When a taxpayer's income increases $1,000 and the taxes owed increases from $7,867 to $8,177,the marginal tax rate is ______ percent.

An estate tax is imposed on the value of an individual's property at the time of his or her death.

An office audit requires that a taxpayer visit an IRS office to clarify some aspect of his or her tax return.

Earned income is money received from:

Which of the following good or service is subject to an excise tax?

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

An exclusion is earnings not included in gross income.

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

Which one of the following is included in gross income?

Mary Watson bought 20 shares of stock one and a 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:

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:

A $2,000 deposit to a tax-deferred individual retirement account (IRA)for a person in a 25 percent tax bracket would result in a reduced tax bill of:

An exemption affects a person's tax situation by:

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stock

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

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Exam 4: Planning Your Tax Strategy

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?

Capital gains refer to profits from the sale of stocks,bonds,or real estate.

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

Which statement is true regarding a tax credit?

A drawback of Flexible Spending Accounts is that any account funds must be used to pay for expenses incurred before year's end or the money is lost.

An exclusion affects a person's taxes by:

Why would tax-exempt income provide greater short-term financial benefits than tax-deferred income?

When a taxpayer's income increases $1,000 and the taxes owed increases from $7,867 to $8,177,the marginal tax rate is ______ percent.

An estate tax is imposed on the value of an individual's property at the time of his or her death.

An office audit requires that a taxpayer visit an IRS office to clarify some aspect of his or her tax return.

Earned income is money received from:

Which of the following good or service is subject to an excise tax?

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

An exclusion is earnings not included in gross income.

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

Which one of the following is included in gross income?

Mary Watson bought 20 shares of stock one and a 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:

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:

A $2,000 deposit to a tax-deferred individual retirement account (IRA)for a person in a 25 percent tax bracket would result in a reduced tax bill of:

An exemption affects a person's tax situation by:

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stock

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters