Question 1

What are the five filing status categories for federal income taxes?

Accepted Answer

The five categories are:
1.Sin

Question 2

Which of the following is NOT an action that can reduce your taxes?

Accepted Answer

A)  Owning a home. 
B)  Taking out a consumer loan. 
C)  Paying certain work expenses such as union dues. 
D)  Depositing money into a flexible spending account (FS
A) . 
E)  Investing in municipal bonds. 
A)  Owning a home. 
B)  Taking out a consumer loan. 
C)  Paying certain work expenses such as union dues. 
D)  Depositing money into a flexible spending account (FS
A) . 
E)  Investing in municipal bonds.

Question 3

Bob was married to Sandy,and they have a 12-year-old son.Sandy passed away last year.Bob needs to complete his federal income taxes for the year.What filing status could he use because of his marital status?

Accepted Answer

A)  Single 
B)  Married, filing a joint return 
C)  Head of household 
D)  Qualifying widow or widower 
E)  Married, but filing individually 
A)  Single 
B)  Married, filing a joint return 
C)  Head of household 
D)  Qualifying widow or widower 
E)  Married, but filing individually

Question 4

A tax credit reduces the taxable income on which the tax liability is computed.

Accepted Answer

A) True 
 B)False

Question 5

Interest paid on a home equity loan is not deductible.

Accepted Answer

A) True 
 B)False

Question 6

Joseph needs to complete his income taxes for the year.He has already calculated his adjusted gross income.What does he need to do next?

Accepted Answer

A)  Add his tax-exempt income. 
B)  Subtract his itemized deductions. 
C)  Add his tax credits. 
D)  Subtract his tax-exempt income. 
E)  Add his tax exemptions. 
A)  Add his tax-exempt income. 
B)  Subtract his itemized deductions. 
C)  Add his tax credits. 
D)  Subtract his tax-exempt income. 
E)  Add his tax exemptions.

Question 7

The itemized deduction allowed for an individual 65 and older is higher than the itemized deduction for a younger taxpayer.

Accepted Answer

A) True 
 B)False

Question 8

Identify and provide examples of four types of taxes that most people pay.

Accepted Answer

Taxes on purchases: sales tax on purchas

Question 9

One of the best tax shelters is owning a car.

Accepted Answer

A) True 
 B)False

Question 10

Adjustments to income include all of the following except

Accepted Answer

A)  Alimony payments. 
B)  Contributions to a Keogh retirement plan. 
C)  Traditional IRA contributions. 
D)  Charity contributions. 
E)  Penalties for early withdrawal of savings. 
A)  Alimony payments. 
B)  Contributions to a Keogh retirement plan. 
C)  Traditional IRA contributions. 
D)  Charity contributions. 
E)  Penalties for early withdrawal of savings.

Question 11

The maximum that an individual can contribute to a Coverdell Education Savings Account each year is

Accepted Answer

A)  $1,000. 
B)  $2,000. 
C)  $3,000. 
D)  $5,000. 
E)  $15,500. 
A)  $1,000. 
B)  $2,000. 
C)  $3,000. 
D)  $5,000. 
E)  $15,500.

Question 12

Total income (gross)includes

Accepted Answer

A)  Exclusions from income. 
B)  Tax deductions. 
C)  Tax-deferred income. 
D)  Passive income. 
E)  Tax-exempt income. 
A)  Exclusions from income. 
B)  Tax deductions. 
C)  Tax-deferred income. 
D)  Passive income. 
E)  Tax-exempt income.

Question 13

All individuals with taxable income need to complete the AMT calculation.

Accepted Answer

A) True 
 B)False

Question 14

A tax imposed on the value of a person's property at the time of death is called a(n)

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 15

Jason's household consists of himself,his wife,and their 2-year-old daughter.How much can Jason claim for his exemptions?

Accepted Answer

A)  $1,000. 
B)  $3,700. 
C)  $7,400. 
D)  $11,100. 
E)  $15,000. 
A)  $1,000. 
B)  $3,700. 
C)  $7,400. 
D)  $11,100. 
E)  $15,000.

Question 16

If Brenda wants to pay her fair share of taxes,no more and no less,she should practice

Accepted Answer

A)  Tax evasion. 
B)  Tax avoidance. 
C)  Tax elimination. 
D)  Tax maximization. 
E)  Tax acceleration. 
A)  Tax evasion. 
B)  Tax avoidance. 
C)  Tax elimination. 
D)  Tax maximization. 
E)  Tax acceleration.

Question 17

Using the following table,calculate the taxes for an individual with taxable income of $50,000.

Accepted Answer

@#IMG-DLM& Taxes = (10% × $8,500)+ {15%

Question 18

An example of an excise tax is Social Security.

Accepted Answer

A) True 
 B)False

Question 19

At the end of the year,Xavier received a form from his employer that reported annual earnings and the amounts deducted for taxes.That form is called a

Accepted Answer

A) 1040. 
B) 1099. 
C) W-2. 
D) W-4. 
E) Schedule A. 
A) 1040. 
B) 1099. 
C) W-2. 
D) W-4. 
E) Schedule A.

Question 20

Which of the following is NOT a valid form for filing federal income taxes?

Accepted Answer

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

What are the five filing status categories for federal income taxes?

Which of the following is NOT an action that can reduce your taxes?

Bob was married to Sandy,and they have a 12-year-old son.Sandy passed away last year.Bob needs to complete his federal income taxes for the year.What filing status could he use because of his marital status?

A tax credit reduces the taxable income on which the tax liability is computed.

Interest paid on a home equity loan is not deductible.

Joseph needs to complete his income taxes for the year.He has already calculated his adjusted gross income.What does he need to do next?

The itemized deduction allowed for an individual 65 and older is higher than the itemized deduction for a younger taxpayer.

Identify and provide examples of four types of taxes that most people pay.

One of the best tax shelters is owning a car.

Adjustments to income include all of the following except

The maximum that an individual can contribute to a Coverdell Education Savings Account each year is

Total income (gross)includes

All individuals with taxable income need to complete the AMT calculation.

A tax imposed on the value of a person's property at the time of death is called a(n)

Jason's household consists of himself,his wife,and their 2-year-old daughter.How much can Jason claim for his exemptions?

If Brenda wants to pay her fair share of taxes,no more and no less,she should practice

Using the following table,calculate the taxes for an individual with taxable income of $50,000.

An example of an excise tax is Social Security.

At the end of the year,Xavier received a form from his employer that reported annual earnings and the amounts deducted for taxes.That form is called a

Which of the following is NOT a valid form for filing federal income taxes?

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

What are the five filing status categories for federal income taxes?

Which of the following is NOT an action that can reduce your taxes?

Bob was married to Sandy,and they have a 12-year-old son.Sandy passed away last year.Bob needs to complete his federal income taxes for the year.What filing status could he use because of his marital status?

A tax credit reduces the taxable income on which the tax liability is computed.

Interest paid on a home equity loan is not deductible.

Joseph needs to complete his income taxes for the year.He has already calculated his adjusted gross income.What does he need to do next?

The itemized deduction allowed for an individual 65 and older is higher than the itemized deduction for a younger taxpayer.

Identify and provide examples of four types of taxes that most people pay.

One of the best tax shelters is owning a car.

Adjustments to income include all of the following except

The maximum that an individual can contribute to a Coverdell Education Savings Account each year is

Total income (gross)includes

All individuals with taxable income need to complete the AMT calculation.

A tax imposed on the value of a person's property at the time of death is called a(n)

Jason's household consists of himself,his wife,and their 2-year-old daughter.How much can Jason claim for his exemptions?

If Brenda wants to pay her fair share of taxes,no more and no less,she should practice

Using the following table,calculate the taxes for an individual with taxable income of $50,000.

An example of an excise tax is Social Security.

At the end of the year,Xavier received a form from his employer that reported annual earnings and the amounts deducted for taxes.That form is called a

Which of the following is NOT a valid form for filing federal income taxes?

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

Filters