Question 1

Athena wants to determine if she should itemize her deductions.She has identified several possible deductions.Which of the following is NOT a proper deduction?

Accepted Answer

A)  Contributions to charitable organizations 
B)  Mortgage interest 
C)  Medical and dental expenses in excess of 7.5% of AGI 
D)  Miscellaneous expenses less than 2% of AGI 
E)  State income taxes 
A)  Contributions to charitable organizations 
B)  Mortgage interest 
C)  Medical and dental expenses in excess of 7.5% of AGI 
D)  Miscellaneous expenses less than 2% of AGI 
E)  State income taxes D

Question 2

An advantage of investing in a 401(k)plan is the

Accepted Answer

A)  Ability to invest up to 25% of your annual income. 
B)  Opportunity to save $5,000 per year. 
C)  Possibility of receiving an employer match on your contributions. 
D)  Ability to pay taxes on distributions. 
E)  Ability to roll IRA contributions into a 401(k). 
A)  Ability to invest up to 25% of your annual income. 
B)  Opportunity to save $5,000 per year. 
C)  Possibility of receiving an employer match on your contributions. 
D)  Ability to pay taxes on distributions. 
E)  Ability to roll IRA contributions into a 401(k). C

Question 3

Tom needs to complete his taxes.He should be able to find a tax preparation service to complete his tax forms for as little as $15.

Accepted Answer

A) True 
 B)False  False

Question 4

Tax resources include all of the following except

Accepted Answer

A)  IRS publications. 
B)  IRS enrolled agents. 
C)  Accountants. 
D)  Attorneys. 
E)  All of these are tax resources. 
A)  IRS publications. 
B)  IRS enrolled agents. 
C)  Accountants. 
D)  Attorneys. 
E)  All of these are tax resources.

Question 5

Income that is taxed at a later date is

Accepted Answer

A)  Adjusted gross income. 
B)  Earned income. 
C)  Exclusions from income. 
D)  Tax-deferred income. 
E)  Tax-exempt income. 
A)  Adjusted gross income. 
B)  Earned income. 
C)  Exclusions from income. 
D)  Tax-deferred income. 
E)  Tax-exempt income.

Question 6

Who is ultimately responsible for supplying accurate and complete information for completing a tax return?

Accepted Answer

A)  Professional tax preparer 
B)  IRS enrolled agent 
C)  Taxpayer 
D)  Taxpayer's dependents 
E)  Taxpayer's attorney 
A)  Professional tax preparer 
B)  IRS enrolled agent 
C)  Taxpayer 
D)  Taxpayer's dependents 
E)  Taxpayer's attorney

Question 7

Amanda and Jack are working on their taxes and need to determine which form to file.They had wages,interest,and dividends.In addition,they bought a house this past year and are thinking of itemizing their deductions.Which form should they use?

Accepted Answer

A)  1040EZ 
B)  1040A 
C)  1040 
D)  1040X 
E)  1040Z 
A)  1040EZ 
B)  1040A 
C)  1040 
D)  1040X 
E)  1040Z

Question 8

What are two steps you can take if you think that you will be in a lower tax bracket next year?

Accepted Answer

1.Accelerate deductions into the current

Question 9

A tax credit has a full dollar effect in lowering taxes.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is NOT a tax that most people pay?

Accepted Answer

A)  Federal taxes on earnings 
B)  Federal taxes on possessions 
C)  Federal taxes on wealth 
D)  Local taxes on property 
E)  State taxes on purchases 
A)  Federal taxes on earnings 
B)  Federal taxes on possessions 
C)  Federal taxes on wealth 
D)  Local taxes on property 
E)  State taxes on purchases

Question 11

John and Lisa are completing their federal income taxes for the year and have identified the amounts listed here.How much can they rightfully deduct?
• AGI: $45,000
• State income taxes: $3,000
• Mortgage interest: $5,500
• Charitable contributions: $1,250

Accepted Answer

Deductions include these amoun

Question 12

If Jack was in a 25% tax bracket and received a $1,000 tax deduction,by how much would his taxes be reduced?

Accepted Answer

A)  $25 
B)  $50 
C)  $250 
D)  $500 
E)  $1,000 
A)  $25 
B)  $50 
C)  $250 
D)  $500 
E)  $1,000

Question 13

Using the following table,identify the following for an individual with taxable income of $75,000.
a.Marginal tax rate
b.Average tax rate

Accepted Answer

@#IMG-DLM& a.Marginal tax rate = Taxes on the next

Question 14

Cash and prizes won on television game shows are usually subject to both federal and state taxes.

Accepted Answer

A) True 
 B)False

Question 15

Using the following table,identify the following for an individual with taxable income of $34,500.
a.Marginal tax rate
b.Average tax rate

Accepted Answer

@#IMG-DLM& a.Marginal tax rate = Taxes on the next

Question 16

This tax is a major financial planning factor for most people because it is sometimes imposed at the federal,state,and local levels.

Accepted Answer

A)  Estate tax 
B)  Excise tax 
C)  Income tax 
D)  Real estate tax 
E)  Sales tax 
A)  Estate tax 
B)  Excise tax 
C)  Income tax 
D)  Real estate tax 
E)  Sales tax

Question 17

Using the following table,calculate the taxes for an individual with taxable income of $25,000.

Accepted Answer

@#IMG-DLM& Taxes = (10% × $8,5

Question 18

The maximum that an individual can contribute to a Roth IRA each year is

Accepted Answer

A)  $1,000. 
B)  $3,000. 
C)  $5,000. 
D)  $10,000. 
E)  $15,500. 
A)  $1,000. 
B)  $3,000. 
C)  $5,000. 
D)  $10,000. 
E)  $15,500.

Question 19

Tax software can save taxpayers 25 hours or more when preparing Form 1040.

Accepted Answer

A) True 
 B)False

Question 20

Tanya is a single low-income working parent,and Fred is a single high-income working parent.Because of her status,Tanya,but not Fred,may be eligible for the

Accepted Answer

A)  Alternative minimum tax. 
B)  Earned income credit. 
C)  Itemized deduction credit. 
D)  Student deduction. 
E)  Withholding credit. 
A)  Alternative minimum tax. 
B)  Earned income credit. 
C)  Itemized deduction credit. 
D)  Student deduction. 
E)  Withholding credit.

Athena wants to determine if she should itemize her deductions.She has identified several possible deductions.Which of the following is NOT a proper deduction?

An advantage of investing in a 401(k)plan is the

Tom needs to complete his taxes.He should be able to find a tax preparation service to complete his tax forms for as little as $15.

Tax resources include all of the following except

Income that is taxed at a later date is

Who is ultimately responsible for supplying accurate and complete information for completing a tax return?

Amanda and Jack are working on their taxes and need to determine which form to file.They had wages,interest,and dividends.In addition,they bought a house this past year and are thinking of itemizing their deductions.Which form should they use?

What are two steps you can take if you think that you will be in a lower tax bracket next year?

A tax credit has a full dollar effect in lowering taxes.

Which of the following is NOT a tax that most people pay?

John and Lisa are completing their federal income taxes for the year and have identified the amounts listed here.How much can they rightfully deduct? • AGI: $45,000 • State income taxes: $3,000 • Mortgage interest: $5,500 • Charitable contributions: $1,250

If Jack was in a 25% tax bracket and received a $1,000 tax deduction,by how much would his taxes be reduced?

Using the following table,identify the following for an individual with taxable income of $75,000. a.Marginal tax rate b.Average tax rate

Cash and prizes won on television game shows are usually subject to both federal and state taxes.

Using the following table,identify the following for an individual with taxable income of $34,500. a.Marginal tax rate b.Average tax rate

This tax is a major financial planning factor for most people because it is sometimes imposed at the federal,state,and local levels.

Using the following table,calculate the taxes for an individual with taxable income of $25,000.

The maximum that an individual can contribute to a Roth IRA each year is

Tax software can save taxpayers 25 hours or more when preparing Form 1040.

Tanya is a single low-income working parent,and Fred is a single high-income working parent.Because of her status,Tanya,but not Fred,may be eligible for the

Personal Financial Planning in Action

Money Management Skills

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing Basics and Evaluating Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

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Exam 3: Taxes in Your Financial Plan

Athena wants to determine if she should itemize her deductions.She has identified several possible deductions.Which of the following is NOT a proper deduction?

An advantage of investing in a 401(k)plan is the

Tom needs to complete his taxes.He should be able to find a tax preparation service to complete his tax forms for as little as $15.

Tax resources include all of the following except

Income that is taxed at a later date is

Who is ultimately responsible for supplying accurate and complete information for completing a tax return?

Amanda and Jack are working on their taxes and need to determine which form to file.They had wages,interest,and dividends.In addition,they bought a house this past year and are thinking of itemizing their deductions.Which form should they use?

What are two steps you can take if you think that you will be in a lower tax bracket next year?

A tax credit has a full dollar effect in lowering taxes.

Which of the following is NOT a tax that most people pay?

John and Lisa are completing their federal income taxes for the year and have identified the amounts listed here.How much can they rightfully deduct? • AGI: $45,000 • State income taxes: $3,000 • Mortgage interest: $5,500 • Charitable contributions: $1,250

If Jack was in a 25% tax bracket and received a $1,000 tax deduction,by how much would his taxes be reduced?

Using the following table,identify the following for an individual with taxable income of $75,000. a.Marginal tax rate b.Average tax rate

Cash and prizes won on television game shows are usually subject to both federal and state taxes.

Using the following table,identify the following for an individual with taxable income of $34,500. a.Marginal tax rate b.Average tax rate

This tax is a major financial planning factor for most people because it is sometimes imposed at the federal,state,and local levels.

Using the following table,calculate the taxes for an individual with taxable income of $25,000.

The maximum that an individual can contribute to a Roth IRA each year is

Tax software can save taxpayers 25 hours or more when preparing Form 1040.

Tanya is a single low-income working parent,and Fred is a single high-income working parent.Because of her status,Tanya,but not Fred,may be eligible for the

Personal Financial Planning in Action

Money Management Skills

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing Basics and Evaluating Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

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