Question 1

Evan is not concerned about immediate tax benefits but instead wants to minimize his future taxes.Which of these would be the best for him to invest in today?

Accepted Answer

A)  Municipal bonds 
B)  A tax-deferred annuity 
C)  A Section 529 savings plan 
D)  A 401(k) plan 
E)  A Roth IRA 
A)  Municipal bonds 
B)  A tax-deferred annuity 
C)  A Section 529 savings plan 
D)  A 401(k) plan 
E)  A Roth IRA

Question 2

Connie thinks that her salary and tax rate for next year will be lower than for this year.What step should she take to minimize her taxes in the current year?

Accepted Answer

A)  Accelerate receipt of income. 
B)  Delay deductions. 
C)  Practice tax evasion. 
D)  Accelerate deductions. 
E)  None of these will allow her to minimize her taxes. 
A)  Accelerate receipt of income. 
B)  Delay deductions. 
C)  Practice tax evasion. 
D)  Accelerate deductions. 
E)  None of these will allow her to minimize her taxes.

Question 3

Tax Freedom Day represents the day until which the average person works to pay her or his taxes each year.

Accepted Answer

A) True 
 B)False

Question 4

Identify and provide an example of at least three types of income subject to taxation.

Accepted Answer

Income types include the following:
• Ea

Question 5

Individuals who have high income reported on Form 1099 may be required to pay estimated tax payments.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

1.Delay deductions since they

Question 7

Determining adjusted gross income is the final step in calculating federal income tax.

Accepted Answer

A) True 
 B)False

Question 8

The major sections of Form 1040 include all of the following except

Accepted Answer

A)  Filing status and exemptions. 
B)  Adjustments to income (AGI). 
C)  Tax credits. 
D)  Signature. 
E)  All of these are major sections of Form 1040. 
A)  Filing status and exemptions. 
B)  Adjustments to income (AGI). 
C)  Tax credits. 
D)  Signature. 
E)  All of these are major sections of Form 1040.

Question 9

A tax due on the purchase of gasoline is called a(n)

Accepted Answer

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

Question 10

Gross income after certain reductions have been made 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 11

Income that is never subject to tax is called

Accepted Answer

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

Question 12

Individuals can file their federal taxes using all of the following except

Accepted Answer

A)  Tax software. 
B)  Mail. 
C)  Electronic filing. 
D)  Fax. 
E)  All of these can be used. 
A)  Tax software. 
B)  Mail. 
C)  Electronic filing. 
D)  Fax. 
E)  All of these can be used.

Question 13

The amount levied on the value of property bequeathed by a deceased person is

Accepted Answer

A)  Inheritance tax. 
B)  Excise tax. 
C)  Social Security tax. 
D)  Real estate tax. 
E)  Sales tax. 
A)  Inheritance tax. 
B)  Excise tax. 
C)  Social Security tax. 
D)  Real estate tax. 
E)  Sales tax.

Question 14

David thinks that his salary and tax rate for next year will be higher than for this year.What step should he take to minimize his taxes in the current year?

Accepted Answer

A)  Delay receipt of income. 
B)  Delay filing taxes. 
C)  Accelerate receipt of income. 
D)  Accelerate deductions. 
E)  None of these will allow him to minimize his taxes. 
A)  Delay receipt of income. 
B)  Delay filing taxes. 
C)  Accelerate receipt of income. 
D)  Accelerate deductions. 
E)  None of these will allow him to minimize his taxes.

Question 15

Stephanie is planning to file taxes this year.She is married with two dependents and is considering using a tax preparation service.What are three factors she should consider before hiring a particular service?

Accepted Answer

The following questions should be asked:

Question 16

How long are you required to keep tax documentation?

Accepted Answer

A)  Until you file your returns. 
B)  3 years. 
C)  5 years. 
D)  10 years. 
E)  15 years. 
A)  Until you file your returns. 
B)  3 years. 
C)  5 years. 
D)  10 years. 
E)  15 years.

Question 17

The tax that is a major source of revenue for local governments 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 18

When calculating federal income taxes,what increases "income"?

Accepted Answer

A)  Exclusions 
B)  Tax-exempt income 
C)  Tax-deferred income 
D)  Alimony received
Re 
E)  Tax deductions 
A)  Exclusions 
B)  Tax-exempt income 
C)  Tax-deferred income 
D)  Alimony received
Re 
E)  Tax deductions

Question 19

Using the following table,calculate the taxes for an individual with taxable income of $20,800.

Accepted Answer

A)  $850. 
B)  $2,695. 
C)  $5,175. 
D)  $6,025. 
E)  $20,800. 
A)  $850. 
B)  $2,695. 
C)  $5,175. 
D)  $6,025. 
E)  $20,800.

Question 20

In 2011,taxable income was reduced by ______ for each exemption claimed.

Accepted Answer

A)  $1,000 
B)  $2,500 
C)  $3,700 
D)  $5,000 
E)  $10,000 
A)  $1,000 
B)  $2,500 
C)  $3,700 
D)  $5,000 
E)  $10,000

Evan is not concerned about immediate tax benefits but instead wants to minimize his future taxes.Which of these would be the best for him to invest in today?

Connie thinks that her salary and tax rate for next year will be lower than for this year.What step should she take to minimize her taxes in the current year?

Tax Freedom Day represents the day until which the average person works to pay her or his taxes each year.

Identify and provide an example of at least three types of income subject to taxation.

Individuals who have high income reported on Form 1099 may be required to pay estimated tax payments.

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

Determining adjusted gross income is the final step in calculating federal income tax.

The major sections of Form 1040 include all of the following except

A tax due on the purchase of gasoline is called a(n)

Gross income after certain reductions have been made is

Income that is never subject to tax is called

Individuals can file their federal taxes using all of the following except

The amount levied on the value of property bequeathed by a deceased person is

David thinks that his salary and tax rate for next year will be higher than for this year.What step should he take to minimize his taxes in the current year?

Stephanie is planning to file taxes this year.She is married with two dependents and is considering using a tax preparation service.What are three factors she should consider before hiring a particular service?

How long are you required to keep tax documentation?

The tax that is a major source of revenue for local governments is called a(n)

When calculating federal income taxes,what increases "income"?

Using the following table,calculate the taxes for an individual with taxable income of $20,800.

In 2011,taxable income was reduced by ______ for each exemption claimed.

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

Evan is not concerned about immediate tax benefits but instead wants to minimize his future taxes.Which of these would be the best for him to invest in today?

Connie thinks that her salary and tax rate for next year will be lower than for this year.What step should she take to minimize her taxes in the current year?

Tax Freedom Day represents the day until which the average person works to pay her or his taxes each year.

Identify and provide an example of at least three types of income subject to taxation.

Individuals who have high income reported on Form 1099 may be required to pay estimated tax payments.

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

Determining adjusted gross income is the final step in calculating federal income tax.

The major sections of Form 1040 include all of the following except

A tax due on the purchase of gasoline is called a(n)

Gross income after certain reductions have been made is

Income that is never subject to tax is called

Individuals can file their federal taxes using all of the following except

The amount levied on the value of property bequeathed by a deceased person is

David thinks that his salary and tax rate for next year will be higher than for this year.What step should he take to minimize his taxes in the current year?

Stephanie is planning to file taxes this year.She is married with two dependents and is considering using a tax preparation service.What are three factors she should consider before hiring a particular service?

How long are you required to keep tax documentation?

The tax that is a major source of revenue for local governments is called a(n)

When calculating federal income taxes,what increases "income"?

Using the following table,calculate the taxes for an individual with taxable income of $20,800.

In 2011,taxable income was reduced by ______ for each exemption claimed.

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