Question 1

Tax preparers must be licensed by either the state of federal government.

Accepted Answer

A) True 
 B)False

Question 2

A ____ would be most likely to have to pay estimated taxes.

Accepted Answer

A)  school teacher 
B)  manager for a major industrial firm 
C)  self-employed plumber 
D)  union worker 
E)  corporate attorney 
A)  school teacher 
B)  manager for a major industrial firm 
C)  self-employed plumber 
D)  union worker 
E)  corporate attorney

Question 3

All taxpayers have an equal probability of having their tax returns audited.

Accepted Answer

A) True 
 B)False

Question 4

An investment must be owned over one year in order to qualify for long-term capital gains treatment.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following offer tax preparation services?

Accepted Answer

A)  National and local tax services 
B)  Certified Public Accountants (CPAs) 
C)  Enrolled Agents (EAs) 
D)  Tax Attorneys 
E)  All of the above can offer tax preparation services 
A)  National and local tax services 
B)  Certified Public Accountants (CPAs) 
C)  Enrolled Agents (EAs) 
D)  Tax Attorneys 
E)  All of the above can offer tax preparation services

Question 6

Opening a traditional IRA would allow you to defer taxes on the earning.

Accepted Answer

A) True 
 B)False

Question 7

Adjustments to income will decrease your taxable income.

Accepted Answer

A) True 
 B)False

Question 8

You are more likely to have your tax return audited if you work for a for-profit company,compared to a non-profit organization.

Accepted Answer

A) True 
 B)False

Question 9

A progressive tax system is one in which higher-income people pay ____ than lower-income people.

Accepted Answer

A)  a higher dollar amount in taxes 
B)  tax at a higher rate 
C)  a lower dollar amount in taxes 
D)  tax at a lower rate 
E)  tax at the same rate 
A)  a higher dollar amount in taxes 
B)  tax at a higher rate 
C)  a lower dollar amount in taxes 
D)  tax at a lower rate 
E)  tax at the same rate

Question 10

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Your marital status [will | will not] have an effect on the amount of social security tax you pay.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 11

Mr.and Mrs.McMurray have three children ages 3,6,and 12 for which they paid $6,000 in child care expenses this year.Assume the McMurray's tax liability is initially calculated to be $10,000.Then apply a 20% tax credit for child care expenses within limits normally allowed.How much will their final tax liability be?

Accepted Answer

A)  $ 8,000 
B)  $ 8,500 
C)  $ 8,800 
D)  $ 9,040 
E)  $10,000 
A)  $ 8,000 
B)  $ 8,500 
C)  $ 8,800 
D)  $ 9,040 
E)  $10,000

Question 12

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-You will have to list and be able to prove [standard | itemized] deductions if audited.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 13

Sue and Tim are married taxpayers in the 33% marginal tax bracket.In 2011,they sold common stock shares for a long-term capital gain of $3,800.They also sold some technology stock for a long-term capital loss of $9,000.In addition,they sold the home they had lived in for the past 10 years and experienced a $75,000 gain on the house.How much will their net capital gains (or losses)be for 2011? How much will they pay (or save)in taxes as a result of these transactions?

Accepted Answer

$3,000 capital loss this year with a $2,

Question 14

If you are married,you can legally file a single tax return.

Accepted Answer

A) True 
 B)False

Question 15

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Tax [avoidance | evasion] involves failure to accurately report income or deductions,and,in extreme cases,a failure to pay taxes altogether.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 16

You have no employer provided pension plan; your IRA contributions are treated as

Accepted Answer

A)  an adjustments to gross income. 
B)  an additional personal exemption. 
C)  part of the standard deduction. 
D)  an itemized deduction. 
E)  a tax credit. 
A)  an adjustments to gross income. 
B)  an additional personal exemption. 
C)  part of the standard deduction. 
D)  an itemized deduction. 
E)  a tax credit.

Question 17

Your average tax rate is your

Accepted Answer

A)  adjusted gross income divided by tax withheld. 
B)  adjusted gross income divided by tax liability. 
C)  tax liability divided by taxable income. 
D)  taxable income divided by tax withheld. 
E)  gross income divided by tax refund. 
A)  adjusted gross income divided by tax withheld. 
B)  adjusted gross income divided by tax liability. 
C)  tax liability divided by taxable income. 
D)  taxable income divided by tax withheld. 
E)  gross income divided by tax refund.

Question 18

By filing a tax extension,one does not have to pay his income tax liability until August 15.

Accepted Answer

A) True 
 B)False

Question 19

Your marital status will affect the amount of social security you must pay in a year.

Accepted Answer

A) True 
 B)False

Question 20

The personal exemption for a student can be taken both by the parent and by the child.

Accepted Answer

A) True 
 B)False

Tax preparers must be licensed by either the state of federal government.

A ____ would be most likely to have to pay estimated taxes.

All taxpayers have an equal probability of having their tax returns audited.

An investment must be owned over one year in order to qualify for long-term capital gains treatment.

Which of the following offer tax preparation services?

Opening a traditional IRA would allow you to defer taxes on the earning.

Adjustments to income will decrease your taxable income.

You are more likely to have your tax return audited if you work for a for-profit company,compared to a non-profit organization.

A progressive tax system is one in which higher-income people pay ____ than lower-income people.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Your marital status [will | will not] have an effect on the amount of social security tax you pay.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -You will have to list and be able to prove [standard | itemized] deductions if audited.

If you are married,you can legally file a single tax return.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Tax [avoidance | evasion] involves failure to accurately report income or deductions,and,in extreme cases,a failure to pay taxes altogether.

You have no employer provided pension plan; your IRA contributions are treated as

Your average tax rate is your

By filing a tax extension,one does not have to pay his income tax liability until August 15.

Your marital status will affect the amount of social security you must pay in a year.

The personal exemption for a student can be taken both by the parent and by the child.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

Exam 3: Preparing Your Taxes

Tax preparers must be licensed by either the state of federal government.

A ____ would be most likely to have to pay estimated taxes.

All taxpayers have an equal probability of having their tax returns audited.

An investment must be owned over one year in order to qualify for long-term capital gains treatment.

Which of the following offer tax preparation services?

Opening a traditional IRA would allow you to defer taxes on the earning.

Adjustments to income will decrease your taxable income.

You are more likely to have your tax return audited if you work for a for-profit company,compared to a non-profit organization.

A progressive tax system is one in which higher-income people pay ____ than lower-income people.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Your marital status [will | will not] have an effect on the amount of social security tax you pay.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -You will have to list and be able to prove [standard | itemized] deductions if audited.

If you are married,you can legally file a single tax return.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Tax [avoidance | evasion] involves failure to accurately report income or deductions,and,in extreme cases,a failure to pay taxes altogether.

You have no employer provided pension plan; your IRA contributions are treated as

Your average tax rate is your

By filing a tax extension,one does not have to pay his income tax liability until August 15.

Your marital status will affect the amount of social security you must pay in a year.

The personal exemption for a student can be taken both by the parent and by the child.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters