Question 1

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 2

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)  $15,000. 
C)  $20,000. 
D)  $23,000. 
E)  $57,000. 
A)  $14,000. 
B)  $15,000. 
C)  $20,000. 
D)  $23,000. 
E)  $57,000.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

All citizens of the United States are required to file a federal income tax return if their income falls below a certain level.

Accepted Answer

A) True 
 B)False

Question 6

Jason's household consists of himself, his wife, and their 2-year-old daughter. How much can Jason claim for his exemptions in 2012?

Accepted Answer

A)  $1,000. 
B)  $3,950. 
C)  $7,900. 
D)  $11,850. 
E)  $15,000. 
A)  $1,000. 
B)  $3,950. 
C)  $7,900. 
D)  $11,850. 
E)  $15,000.

Question 7

Which of the following is NOT a tax credit?

Accepted Answer

A)  Adoption tax credit 
B)  Domestic tax credit 
C)  Earned income credit 
D)  Foreign tax credit 
E)  Savers credit 
A)  Adoption tax credit 
B)  Domestic tax credit 
C)  Earned income credit 
D)  Foreign tax credit 
E)  Savers credit

Question 8

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 9

Using the following table, calculate the taxes for an individual with taxable income of $30,000. $$\begin{array} { l r } 
10 \% & \text { Up to } \$ 8,500 \
15 \% & \$ 8,500 - \$ 34,500 \
25 \% & \$ 34,500 - \$ 83,600 \
28 \% & \$ 83,600 - \$ 174,400 \
33 \% & \$ 174,400 - \$ 379,150 \
35 \% & \text { Over } \$ 379,150
\end{array}$$

Accepted Answer

A)  $850 
B)  $2,125 
C)  $4,075 
D)  $4,500 
E)  $6,025 
A)  $850 
B)  $2,125 
C)  $4,075 
D)  $4,500 
E)  $6,025

Question 10

Gross income less Adjustments to Income equals

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

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 12

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 13

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

Accepted Answer

A) True 
 B)False

Question 14

Tax assistance sources include all of the following except

Accepted Answer

A)  IRS publications. 
B)  IRS phone hotline. 
C)  The Ernst & Young Tax Guide. 
D)  The Internet. 
E)  All of these are tax assistance sources. 
A)  IRS publications. 
B)  IRS phone hotline. 
C)  The Ernst & Young Tax Guide. 
D)  The Internet. 
E)  All of these are tax assistance sources.

Question 15

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

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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 18

Taxpayers over 65 can only deduct expenses that are greater than 7.5% of adjusted gross income for

Accepted Answer

A)  Contributions to charitable organizations. 
B)  Mortgage interest. 
C)  Medical and dental expenses. 
D)  Miscellaneous expenses. 
E)  Taxes. 
A)  Contributions to charitable organizations. 
B)  Mortgage interest. 
C)  Medical and dental expenses. 
D)  Miscellaneous expenses. 
E)  Taxes.

Question 19

If Diane was in a 25% tax bracket and received a $1,000 tax credit, by how much would her 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 20

At the end of the year, employees receive a ____ form that reports annual earnings and the amounts deducted for taxes from their employers.

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

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

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

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

All citizens of the United States are required to file a federal income tax return if their income falls below a certain level.

Jason's household consists of himself, his wife, and their 2-year-old daughter. How much can Jason claim for his exemptions in 2012?

Which of the following is NOT a tax credit?

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?

Using the following table, calculate the taxes for an individual with taxable income of $30,000. 10\% Up to \ 8,500 15\% \ 8,500-\ 34,500 25\% \ 34,500-\ 83,600 28\% \ 83,600-\ 174,400 33\% \ 174,400-\ 379,150 35\% Over \ 379,150

Gross income less Adjustments to Income equals

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?

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?

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

Tax assistance sources include all of the following except

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

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

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

Taxpayers over 65 can only deduct expenses that are greater than 7.5% of adjusted gross income for

If Diane was in a 25% tax bracket and received a $1,000 tax credit, by how much would her taxes be reduced?

At the end of the year, employees receive a ____ form that reports annual earnings and the amounts deducted for taxes from their employers.

Personal Financial Planning in Action

Money Management Skills

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and 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

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

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

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

All citizens of the United States are required to file a federal income tax return if their income falls below a certain level.

Jason's household consists of himself, his wife, and their 2-year-old daughter. How much can Jason claim for his exemptions in 2012?

Which of the following is NOT a tax credit?

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?

Using the following table, calculate the taxes for an individual with taxable income of $30,000. 10\% Up to \ 8,500 15\% \ 8,500-\ 34,500 25\% \ 34,500-\ 83,600 28\% \ 83,600-\ 174,400 33\% \ 174,400-\ 379,150 35\% Over \ 379,150

Gross income less Adjustments to Income equals

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?

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?

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

Tax assistance sources include all of the following except

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

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

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

Taxpayers over 65 can only deduct expenses that are greater than 7.5% of adjusted gross income for

If Diane was in a 25% tax bracket and received a $1,000 tax credit, by how much would her taxes be reduced?

At the end of the year, employees receive a ____ form that reports annual earnings and the amounts deducted for taxes from their employers.

Personal Financial Planning in Action

Money Management Skills

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters