Question 1

The IRS has made online filing free for millions of taxpayers through the Free File Alliance.

Accepted Answer

A) True 
 B)False

Question 2

The maximum that an individual can contribute to a Keogh plan for the 2014 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 $52,000. 
A)  $2,000. 
B)  10% of annual income. 
C)  $5,000. 
D)  $15,500. 
E)  25% of annual income, up to a maximum of $52,000.

Question 3

At the end of the year, Yvonne received a form from her bank that reported income from her savings. 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 4

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 5

For 2014, the seven-rate system for federal income tax ranges from 10% to 39.6%.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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 for 2 years after the death of his spouse?

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 9

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 10

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 11

When calculating federal income taxes, "gross income" includes all of the following except

Accepted Answer

A)  Earned income. 
B)  Alimony. 
C)  Investment income. 
D)  Earned income credit. 
E)  Passive income. 
A)  Earned income. 
B)  Alimony. 
C)  Investment income. 
D)  Earned income credit. 
E)  Passive income.

Question 12

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 13

Adjusted gross income is increased by the itemized or standard deduction.

Accepted Answer

A) True 
 B)False

Question 14

How long should you keep tax documentation from the date you file your return?

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 15

Athena wants to determine if she should itemize her deductions. She has identified several possible deductions. Which of the following is NOT a proper itemized deduction?

Accepted Answer

A)  Contributions to charitable organizations 
B)  Mortgage interest 
C)  Medical and dental expenses that exceed 10% of AGI 
D)  Miscellaneous expenses less than 2% of AGI 
E)  State income taxes 
A)  Contributions to charitable organizations 
B)  Mortgage interest 
C)  Medical and dental expenses that exceed 10% of AGI 
D)  Miscellaneous expenses less than 2% of AGI 
E)  State income taxes

Question 16

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

Question 17

The types of tax services available that offer professional tax assistance include:

Accepted Answer

A)  National Firms (such as H&R Block) 
B)  Enrolled Agents 
C)  Accountants 
D)  Attorneys 
E)  All of the above 
A)  National Firms (such as H&R Block) 
B)  Enrolled Agents 
C)  Accountants 
D)  Attorneys 
E)  All of the above

Question 18

The maximum that an individual can contribute to a Roth IRA for the 2014 year is

Accepted Answer

A)  $1,000. 
B)  $3,000. 
C)  $5,500. 
D)  $10,000. 
E)  $15,500. 
A)  $1,000. 
B)  $3,000. 
C)  $5,500. 
D)  $10,000. 
E)  $15,500.

Question 19

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 20

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

Accepted Answer

A)  Use tax preparation software to file online. 
B)  Use tax preparation software to print and mail. 
C)  Electronic filing using Free File Alliance. 
D)  Deliver in person. 
E)  All of these can be used. 
A)  Use tax preparation software to file online. 
B)  Use tax preparation software to print and mail. 
C)  Electronic filing using Free File Alliance. 
D)  Deliver in person. 
E)  All of these can be used.

The IRS has made online filing free for millions of taxpayers through the Free File Alliance.

The maximum that an individual can contribute to a Keogh plan for the 2014 year is

At the end of the year, Yvonne received a form from her bank that reported income from her savings. That form is called a

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?

For 2014, the seven-rate system for federal income tax ranges from 10% to 39.6%.

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

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

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 for 2 years after the death of his spouse?

Adjustments to income include all of the following except

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

When calculating federal income taxes, "gross income" includes all of the following except

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

Adjusted gross income is increased by the itemized or standard deduction.

How long should you keep tax documentation from the date you file your return?

Athena wants to determine if she should itemize her deductions. She has identified several possible deductions. Which of the following is NOT a proper itemized deduction?

Recent tax credits include all of the following except the

The types of tax services available that offer professional tax assistance include:

The maximum that an individual can contribute to a Roth IRA for the 2014 year is

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

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

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

Exam 3: Taxes in Your Financial Plan

The IRS has made online filing free for millions of taxpayers through the Free File Alliance.

The maximum that an individual can contribute to a Keogh plan for the 2014 year is

At the end of the year, Yvonne received a form from her bank that reported income from her savings. That form is called a

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?

For 2014, the seven-rate system for federal income tax ranges from 10% to 39.6%.

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

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

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 for 2 years after the death of his spouse?

Adjustments to income include all of the following except

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

When calculating federal income taxes, "gross income" includes all of the following except

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

Adjusted gross income is increased by the itemized or standard deduction.

How long should you keep tax documentation from the date you file your return?

Athena wants to determine if she should itemize her deductions. She has identified several possible deductions. Which of the following is NOT a proper itemized deduction?

Recent tax credits include all of the following except the

The types of tax services available that offer professional tax assistance include:

The maximum that an individual can contribute to a Roth IRA for the 2014 year is

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

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

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