Question 1

Peter filed his federal income taxes,but he needs to make a correction to his income.Which form should he use?

Accepted Answer

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

Question 2

George Franklin paid taxes of $4,375 on a taxable income of $32,000.What was his average tax rate?

Accepted Answer

A)  10% 
B)  13.7% 
C)  15% 
D)  25% 
E)  28% 
A)  10% 
B)  13.7% 
C)  15% 
D)  25% 
E)  28%

Question 3

Sam and Diane are completing their federal income taxes for the year and have identified the amounts listed here.How much can they rightfully deduct?
• AGI: $80,000
• Medical and dental expenses: $9,000
• State income taxes: $3,500
• Mortgage interest: $9,500
• Charitable contributions: $1,000

Accepted Answer

A)  $14,000. 
B)  $17,000. 
C)  $20,000. 
D)  $23,000. 
E)  $57,000. 
A)  $14,000. 
B)  $17,000. 
C)  $20,000. 
D)  $23,000. 
E)  $57,000.

Question 4

Most states do not require state income taxes.

Accepted Answer

A) True 
 B)False

Question 5

Anne and Bill are completing their federal income taxes for the year and have identified the amounts listed here.How much can they rightfully deduct?
• AGI: $92,000
• Medical and dental expenses: $12,000
• State income taxes: $6,500
• Mortgage interest: $12,500
• Charitable contributions: $4,000

Accepted Answer

Itemized deductions include these amount

Question 6

The tax due on the next dollar of income is referred to as 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 7

The maximum that an individual can contribute to a Keogh plan each year is

Accepted Answer

A)  $2,000. 
B)  10% of annual income. 
C)  $5,000. 
D)  $15,500. 
E)  25% of annual income, up to a maximum of $49,000. 
A)  $2,000. 
B)  10% of annual income. 
C)  $5,000. 
D)  $15,500. 
E)  25% of annual income, up to a maximum of $49,000.

Question 8

All of the following can reduce your taxes today except investing in

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 9

A common filing error is signing the return.

Accepted Answer

A) True 
 B)False

Question 10

Lauren owns her business and is thinking about saving for retirement.She wants to invest up to 25% of her annual income.Which plan should she use?

Accepted Answer

A)  Roth IRA 
B)  401(k) 
C)  Keogh plan 
D)  FSA 
E)  Traditional IRA 
A)  Roth IRA 
B)  401(k) 
C)  Keogh plan 
D)  FSA 
E)  Traditional IRA

Question 11

The average tax rate is the taxes paid on the next dollar of income.

Accepted Answer

A) True 
 B)False

Question 12

An IRS agent visited Henry's home to verify some information on his tax return.This visit was called a(n)

Accepted Answer

A)  Correspondence audit. 
B)  Office audit. 
C)  Home audit. 
D)  Field audit. 
E)  Detailed audit. 
A)  Correspondence audit. 
B)  Office audit. 
C)  Home audit. 
D)  Field audit. 
E)  Detailed audit.

Question 13

The adjusted gross income is increased by the itemized or standard deduction.

Accepted Answer

A) True 
 B)False

Question 14

What are three tax strategies you can use to plan for your retirement?
 Identify how these strategies will affect your taxes.

Accepted Answer

1.Invest in a traditional IRA using tax-

Question 15

Payroll deductions for federal government retirement benefits (such as old age,survivor,and disability insurance)are called

Accepted Answer

A)  Estate taxes. 
B)  Excise taxes. 
C)  Social Security taxes. 
D)  Real estate taxes. 
E)  Sales taxes. 
A)  Estate taxes. 
B)  Excise taxes. 
C)  Social Security taxes. 
D)  Real estate taxes. 
E)  Sales taxes.

Question 16

Annie was required to clarify or document minor questions about her tax form by mail.She participated in a(n)

Accepted Answer

A)  Correspondence audit. 
B)  Office audit. 
C)  Home audit. 
D)  Field audit. 
E)  Detailed audit. 
A)  Correspondence audit. 
B)  Office audit. 
C)  Home audit. 
D)  Field audit. 
E)  Detailed audit.

Question 17

Individuals are allowed to give money or items of any value to a person without being subject to taxes.

Accepted Answer

A) True 
 B)False

Question 18

Fred has been completing his own tax returns for years.The IRS has recently contacted him with questions about some of his prior returns.How many years back is he responsible for providing documentation?

Accepted Answer

A)  Until he files his returns. 
B)  3 years. 
C)  6 years. 
D)  10 years. 
E)  15 years. 
A)  Until he files his returns. 
B)  3 years. 
C)  6 years. 
D)  10 years. 
E)  15 years.

Question 19

Tax tables list average tax rates.

Accepted Answer

A) True 
 B)False

Peter filed his federal income taxes,but he needs to make a correction to his income.Which form should he use?

George Franklin paid taxes of $4,375 on a taxable income of $32,000.What was his average tax rate?

Most states do not require state income taxes.

The tax due on the next dollar of income is referred to as the

The maximum that an individual can contribute to a Keogh plan each year is

All of the following can reduce your taxes today except investing in

A common filing error is signing the return.

Lauren owns her business and is thinking about saving for retirement.She wants to invest up to 25% of her annual income.Which plan should she use?

The average tax rate is the taxes paid on the next dollar of income.

An IRS agent visited Henry's home to verify some information on his tax return.This visit was called a(n)

The adjusted gross income is increased by the itemized or standard deduction.

What are three tax strategies you can use to plan for your retirement? Identify how these strategies will affect your taxes.

Payroll deductions for federal government retirement benefits (such as old age,survivor,and disability insurance)are called

Annie was required to clarify or document minor questions about her tax form by mail.She participated in a(n)

Individuals are allowed to give money or items of any value to a person without being subject to taxes.

Fred has been completing his own tax returns for years.The IRS has recently contacted him with questions about some of his prior returns.How many years back is he responsible for providing documentation?

Tax tables list average tax rates.

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

Peter filed his federal income taxes,but he needs to make a correction to his income.Which form should he use?

George Franklin paid taxes of $4,375 on a taxable income of $32,000.What was his average tax rate?

Most states do not require state income taxes.

The tax due on the next dollar of income is referred to as the

The maximum that an individual can contribute to a Keogh plan each year is

All of the following can reduce your taxes today except investing in

A common filing error is signing the return.

Lauren owns her business and is thinking about saving for retirement.She wants to invest up to 25% of her annual income.Which plan should she use?

The average tax rate is the taxes paid on the next dollar of income.

An IRS agent visited Henry's home to verify some information on his tax return.This visit was called a(n)

The adjusted gross income is increased by the itemized or standard deduction.

What are three tax strategies you can use to plan for your retirement? Identify how these strategies will affect your taxes.

Payroll deductions for federal government retirement benefits (such as old age,survivor,and disability insurance)are called

Annie was required to clarify or document minor questions about her tax form by mail.She participated in a(n)

Individuals are allowed to give money or items of any value to a person without being subject to taxes.

Fred has been completing his own tax returns for years.The IRS has recently contacted him with questions about some of his prior returns.How many years back is he responsible for providing documentation?

Tax tables list average tax rates.

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