Question 1

When Tom calculates his taxable income,he should subtract his tax credits from adjusted gross income.

Accepted Answer

A) True 
 B)False

Question 2

Nancy is married to Jerry and needs to complete her tax form.They both earn about the same amount of money each year.What filing status would be best for them?

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 3

In 2011,the U.S.federal tax tables included tax rates of

Accepted Answer

A)  0%, 10%, 20%, 30%, 40%, and 50%. 
B)  7%, 15%, 30%, 33%, 38%, and 52%. 
C)  0%, 25%, 50%, and 75%. 
D)  10%, 15%, 25%, 28%, 33%, and 35%. 
E)  0%, 5%, 20%, 30%, and 50%. 
A)  0%, 10%, 20%, 30%, 40%, and 50%. 
B)  7%, 15%, 30%, 33%, 38%, and 52%. 
C)  0%, 25%, 50%, and 75%. 
D)  10%, 15%, 25%, 28%, 33%, and 35%. 
E)  0%, 5%, 20%, 30%, and 50%.

Question 4

Some tax disputes have been escalated to the U.S.Supreme Court.

Accepted Answer

A) True 
 B)False

Question 5

Penny knows that she needs to file her federal income taxes,but she is unable to do so by April 15.What form does she need to complete to obtain an automatic six-month extension?

Accepted Answer

A)  1040 
B)  1099 
C)  4868 
D)  W-2 
E)  W-4 
A)  1040 
B)  1099 
C)  4868 
D)  W-2 
E)  W-4

Question 6

Amounts given for tuition payments or medical expenses are not subject to gift taxes.

Accepted Answer

A) True 
 B)False

Question 7

The tax based on the total tax due divided by taxable income is called the

Accepted Answer

A)  AMT. 
B)  Average tax rate. 
C)  Income tax rate. 
D)  Marginal tax rate. 
E)  Total tax rate. 
A)  AMT. 
B)  Average tax rate. 
C)  Income tax rate. 
D)  Marginal tax rate. 
E)  Total tax rate.

Question 8

Recent tax credits include all of the following except the

Accepted Answer

A)  Earned income credit. 
B)  Foreign tax credit. 
C)  Adoption tax credit. 
D)  Graduate learning tax credit. 
E)  Retirement tax credit. 
A)  Earned income credit. 
B)  Foreign tax credit. 
C)  Adoption tax credit. 
D)  Graduate learning tax credit. 
E)  Retirement tax credit.

Question 9

Contributions to a Keogh or 401(k)are tax-exempt.

Accepted Answer

A) True 
 B)False

Question 10

Shannon is working on her federal income tax form and wants to determine if she should itemize her deductions.She has identified several possible deductions.Which of the following is an acceptable deduction?

Accepted Answer

A)  $10,000 gift to her cousin 
B)  Credit card interest 
C)  Medical and dental expenses less than 7.5% of AGI 
D)  Miscellaneous expenses in excess of 2% of AGI 
E)  Moving expenses for a new job that is 25 miles from her old home 
A)  $10,000 gift to her cousin 
B)  Credit card interest 
C)  Medical and dental expenses less than 7.5% of AGI 
D)  Miscellaneous expenses in excess of 2% of AGI 
E)  Moving expenses for a new job that is 25 miles from her old home

Question 11

Using the following table,calculate the taxes for an individual with taxable income of $45,000.

Accepted Answer

A)  $6,025 
B)  $7,375 
C)  $8,625 
D)  $20,900 
E)  $45,000. 
A)  $6,025 
B)  $7,375 
C)  $8,625 
D)  $20,900 
E)  $45,000.

Question 12

The maximum amount (in 2010)that an individual can give another in a year without being subject to federal taxes is

Accepted Answer

A)  All gifts are taxable. 
B)  $10,000. 
C)  $13,000. 
D)  $15,000. 
E)  No gifts are taxable. 
A)  All gifts are taxable. 
B)  $10,000. 
C)  $13,000. 
D)  $15,000. 
E)  No gifts are taxable.

Question 13

What is the difference between tax-exempt income and tax-deferred income?

Accepted Answer

Tax-exempt income is never sub

Question 14

Federal income tax returns must be filed by April 1 of each year.

Accepted Answer

A) True 
 B)False

Question 15

At the end of the year,Walter received a form that showed his payments from independent contracting.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 16

The tax designed to ensure that those who receive tax breaks also pay their fair share of taxes is called the

Accepted Answer

A)  AMT. 
B)  Average tax rate. 
C)  Income tax rate. 
D)  Marginal tax rate. 
E)  Total tax rate. 
A)  AMT. 
B)  Average tax rate. 
C)  Income tax rate. 
D)  Marginal tax rate. 
E)  Total tax rate.

Question 17

If Madeline is unable to file her federal tax forms by the deadline,what actions should she take?

Accepted Answer

Madeline should take two speci

Question 18

A worker's primary goal should be to

Accepted Answer

A)  Pay his or her taxes using estimates for income and deductions. 
B)  Pay no income taxes. 
C)  Pay the average tax rate for people working in his or her industry. 
D)  Pay his or her fair share of taxes while taking advantage of appropriate tax benefits. 
E)  Pay no taxes of any type. 
A)  Pay his or her taxes using estimates for income and deductions. 
B)  Pay no income taxes. 
C)  Pay the average tax rate for people working in his or her industry. 
D)  Pay his or her fair share of taxes while taking advantage of appropriate tax benefits. 
E)  Pay no taxes of any type.

Question 19

When you receive an audit notice,you have certain rights.What are some suggestions to follow with an audit?

Accepted Answer

Suggestions include these:
• Decide whet

Question 20

When Paul completes his taxes,he can include all of the following as exemptions except

Accepted Answer

A)  His 12-year-old son. 
B)  Himself. 
C)  His 22-year-old daughter who is a full-time student. 
D)  His wife. 
E)  His 20-year-old son who is working full-time and living in an apartment. 
A)  His 12-year-old son. 
B)  Himself. 
C)  His 22-year-old daughter who is a full-time student. 
D)  His wife. 
E)  His 20-year-old son who is working full-time and living in an apartment.

When Tom calculates his taxable income,he should subtract his tax credits from adjusted gross income.

Nancy is married to Jerry and needs to complete her tax form.They both earn about the same amount of money each year.What filing status would be best for them?

In 2011,the U.S.federal tax tables included tax rates of

Some tax disputes have been escalated to the U.S.Supreme Court.

Penny knows that she needs to file her federal income taxes,but she is unable to do so by April 15.What form does she need to complete to obtain an automatic six-month extension?

Amounts given for tuition payments or medical expenses are not subject to gift taxes.

The tax based on the total tax due divided by taxable income is called the

Recent tax credits include all of the following except the

Contributions to a Keogh or 401(k)are tax-exempt.

Shannon is working on her federal income tax form and wants to determine if she should itemize her deductions.She has identified several possible deductions.Which of the following is an acceptable deduction?

Using the following table,calculate the taxes for an individual with taxable income of $45,000.

The maximum amount (in 2010)that an individual can give another in a year without being subject to federal taxes is

What is the difference between tax-exempt income and tax-deferred income?

Federal income tax returns must be filed by April 1 of each year.

At the end of the year,Walter received a form that showed his payments from independent contracting.That form is called a

The tax designed to ensure that those who receive tax breaks also pay their fair share of taxes is called the

If Madeline is unable to file her federal tax forms by the deadline,what actions should she take?

A worker's primary goal should be to

When you receive an audit notice,you have certain rights.What are some suggestions to follow with an audit?

When Paul completes his taxes,he can include all of the following as exemptions except

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

When Tom calculates his taxable income,he should subtract his tax credits from adjusted gross income.

Nancy is married to Jerry and needs to complete her tax form.They both earn about the same amount of money each year.What filing status would be best for them?

In 2011,the U.S.federal tax tables included tax rates of

Some tax disputes have been escalated to the U.S.Supreme Court.

Penny knows that she needs to file her federal income taxes,but she is unable to do so by April 15.What form does she need to complete to obtain an automatic six-month extension?

Amounts given for tuition payments or medical expenses are not subject to gift taxes.

The tax based on the total tax due divided by taxable income is called the

Recent tax credits include all of the following except the

Contributions to a Keogh or 401(k)are tax-exempt.

Shannon is working on her federal income tax form and wants to determine if she should itemize her deductions.She has identified several possible deductions.Which of the following is an acceptable deduction?

Using the following table,calculate the taxes for an individual with taxable income of $45,000.

The maximum amount (in 2010)that an individual can give another in a year without being subject to federal taxes is

What is the difference between tax-exempt income and tax-deferred income?

Federal income tax returns must be filed by April 1 of each year.

At the end of the year,Walter received a form that showed his payments from independent contracting.That form is called a

The tax designed to ensure that those who receive tax breaks also pay their fair share of taxes is called the

If Madeline is unable to file her federal tax forms by the deadline,what actions should she take?

A worker's primary goal should be to

When you receive an audit notice,you have certain rights.What are some suggestions to follow with an audit?

When Paul completes his taxes,he can include all of the following as exemptions except

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