Question 1

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

Accepted Answer

A) deferred 
B) bonus 
C) excess 
D) capital gains 
E) alternative minimum 
A) deferred 
B) bonus 
C) excess 
D) capital gains 
E) alternative minimum

Question 2

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

Accepted Answer

A) Tax credit. 
B) Exemption. 
C) Exclusion. 
D) Earned income. 
E) Portfolio incomE. 
A) Tax credit. 
B) Exemption. 
C) Exclusion. 
D) Earned income. 
E) Portfolio incomE.

Question 3

Which form would an individual use who has less than $100,000 in taxable income from wages,salaries,tips,unemployment compensation,interest,or dividends,and who is married and does not itemize deductions?

Accepted Answer

A) Form 1040X 
B) Form 1040EZ 
C) Form 1040A 
D) Schedule A 
E) Schedule E 
A) Form 1040X 
B) Form 1040EZ 
C) Form 1040A 
D) Schedule A 
E) Schedule E

Question 4

Tax avoidance refers to illegal actions to reduce one's taxes.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) be married. 
B) be under age 16. 
C) be registered in school. 
D) receive more than one half of his or her support from the taxpayer. 
E) be a relativE. 
A) be married. 
B) be under age 16. 
C) be registered in school. 
D) receive more than one half of his or her support from the taxpayer. 
E) be a relativE.

Question 6

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

Accepted Answer

The answer of Why would tax-exempt income provide greater short-term...

Question 7

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

Accepted Answer

A) passive 
B) earned 
C) portfolio 
D) excluded 
E) capital gains 
A) passive 
B) earned 
C) portfolio 
D) excluded 
E) capital gains

Question 8

Michael closed on his new home December 31,2009 instead of January 1,2010.As a result,Michael

Accepted Answer

A) accelerated tax deductions in 2009. 
B) accelerated tax deductions in 2010. 
C) increased his adjusted gross income in 2009. 
D) decreased his adjusted gross income in 2010. 
E) decreased tax exemptions in 2009. 
A) accelerated tax deductions in 2009. 
B) accelerated tax deductions in 2010. 
C) increased his adjusted gross income in 2009. 
D) decreased his adjusted gross income in 2010. 
E) decreased tax exemptions in 2009.

Question 9

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

Accepted Answer

A) Exemptions 
B) Exclusions 
C) Itemized deductions 
D) Tax credits 
E) Passive income 
A) Exemptions 
B) Exclusions 
C) Itemized deductions 
D) Tax credits 
E) Passive income

Question 10

Randal Ice has adjusted gross income of $32,000.He has medical expenses for the year of $6000.How much of these expenses can he deduct from adjusted gross income?

Accepted Answer

A) $0 
B) $2,400 
C) $3,600 
D) $4,500 
E) $6,000 
A) $0 
B) $2,400 
C) $3,600 
D) $4,500 
E) $6,000

Question 11

A tax on the value of automobiles,boats,or furniture is referred to as a personal property tax.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) itemized deductions 
B) standard deduction 
C) earned tax credit 
D) withholding 
E) capital gains 
A) itemized deductions 
B) standard deduction 
C) earned tax credit 
D) withholding 
E) capital gains

Question 13

The interest paid on which type of loan is not tax deductible?

Accepted Answer

A) home equity loan used to purchase an automobile 
B) credit card 
C) mortgage for a primary residence 
D) mortgage for a second home 
E) second mortgage for a primary residence 
A) home equity loan used to purchase an automobile 
B) credit card 
C) mortgage for a primary residence 
D) mortgage for a second home 
E) second mortgage for a primary residence

Question 14

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

Accepted Answer

A) Roth IRA 
B) Education IRA 
C) Keogh Account 
D) 401(k)Plan 
E) SEP 
A) Roth IRA 
B) Education IRA 
C) Keogh Account 
D) 401(k)Plan 
E) SEP

Question 15

A $2,000 deposit to a tax-deferred retirement account 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 16

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

Accepted Answer

A) earned Income 
B) investment Income 
C) passive Income 
D) other Income 
E) deferred Income 
A) earned Income 
B) investment Income 
C) passive Income 
D) other Income 
E) deferred Income

Question 17

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

Accepted Answer

A) estate 
B) inheritance 
C) excise 
D) general sales 
E) value-added 
A) estate 
B) inheritance 
C) excise 
D) general sales 
E) value-added

Question 18

An exclusion is earnings not included in taxable income.

Accepted Answer

A) True 
 B)False

Question 19

Which one of these investments produces tax-exempt income?

Accepted Answer

A) U.S.savings bonds 
B) corporate stock 
C) stock mutual fund 
D) municipal bond 
E) corporate bond 
A) U.S.savings bonds 
B) corporate stock 
C) stock mutual fund 
D) municipal bond 
E) corporate bond

Question 20

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

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

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

Which form would an individual use who has less than $100,000 in taxable income from wages,salaries,tips,unemployment compensation,interest,or dividends,and who is married and does not itemize deductions?

Tax avoidance refers to illegal actions to reduce one's taxes.

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

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

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

Michael closed on his new home December 31,2009 instead of January 1,2010.As a result,Michael

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

Randal Ice has adjusted gross income of $32,000.He has medical expenses for the year of $6000.How much of these expenses can he deduct from adjusted gross income?

A tax on the value of automobiles,boats,or furniture is referred to as a personal property tax.

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

The interest paid on which type of loan is not tax deductible?

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

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

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

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.

Which one of these investments produces tax-exempt income?

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:

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 Stocks

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

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

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

Which form would an individual use who has less than $100,000 in taxable income from wages,salaries,tips,unemployment compensation,interest,or dividends,and who is married and does not itemize deductions?

Tax avoidance refers to illegal actions to reduce one's taxes.

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

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

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

Michael closed on his new home December 31,2009 instead of January 1,2010.As a result,Michael

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

Randal Ice has adjusted gross income of $32,000.He has medical expenses for the year of $6000.How much of these expenses can he deduct from adjusted gross income?

A tax on the value of automobiles,boats,or furniture is referred to as a personal property tax.

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

The interest paid on which type of loan is not tax deductible?

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

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

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

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.

Which one of these investments produces tax-exempt income?

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:

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 Stocks

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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