Exam 3: Preparing Your Taxes

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Tax planning is [confined to the first quarter of the year | a year-round activity].

Pete and Pam are married with four dependent children.Pete and Pam can legally file using which of the following filing statuses?

Personal exemptions are tax deductions based on the number of taxpayers and dependents in the taxpayer's household.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -If you earn less than $15,000,you likely pay more in [federal income tax | social security taxes].

The standard deduction is a blanket deduction that depends on the taxpayers

Tax practitioners that are Federally licensed are called

A married couple filing a joint return has Ms.Cindy Cook,a CPA,complete their return.The IRS will hold only Ms.Cook responsible for any errors on the return.

The Robertsons,a couple with an AGI of $28,500,decided to contribute the maximum amount possible towards their IRAs even though Mr.Robertson had a pension plan at work.He named his wife as beneficiary of the IRA.What is such a tax strategy called?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -If you pay a professional to prepare your taxes,any errors on the return will be [your | the preparer's] responsibility.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -A tax credit would result from [an IRA contribution | child care expenses].

If your AGI is less than $100,000 and you do not itemize deductions,the IRS will compute your taxes for you.

All major software providers have online versions for preparing federal taxes.This software is

The regular income tax filing deadline is April 1 of each year.

Who would be most likely to have to pay estimated taxes?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The date by which your tax liability must be paid in order to avoid late payment penalties and/or interest is [April 15 | August 15].

For tax purposes,head-of-household refers to

You would typically not include ____ in your gross income.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -My son,age 26 and a full-time college student,earned $5,000 last year.He still lives at home,and I provide over 50% of his support.I [can | cannot] claim him as a dependent on my tax return.

In 2011,the total Social Security tax was

Tax evasion is a legal means to avoid tax liabilities.