Question 1

The Congress writes and passes the Internal Revenue Code.

Accepted Answer

A) True 
 B)False

Question 2

Portfolio-related expenses can be written off against passive income.

Accepted Answer

A) True 
 B)False

Question 3

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Tax [avoidance | evasion] is a perfectly legal practice.

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 4

Gifts received from family and friends are included in gross income.

Accepted Answer

A) True 
 B)False

Question 5

____ income is subject to federal taxes.

Accepted Answer

A)  Gross 
B)  Adjusted gross 
C)  Net 
D)  Take-home 
E)  Taxable 
A)  Gross 
B)  Adjusted gross 
C)  Net 
D)  Take-home 
E)  Taxable

Question 6

Income shifting refers to the process of transferring income from the taxpayer to the IRS.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following are legal methods of reducing your current tax liability?

Accepted Answer

A)  not reporting taxable income you receive 
B)  investing in a tax deferred annuity 
C)  shifting income to your children 
D)  writing off deductions above the actual amount(s)spent 
E)  b and c 
A)  not reporting taxable income you receive 
B)  investing in a tax deferred annuity 
C)  shifting income to your children 
D)  writing off deductions above the actual amount(s)spent 
E)  b and c

Question 8

The federal government gets the majority of its revenue from the ____ tax.

Accepted Answer

A)  sales 
B)  property 
C)  excise 
D)  income 
E)  estate 
A)  sales 
B)  property 
C)  excise 
D)  income 
E)  estate

Question 9

Most major software providers have free online versions for preparing federal taxes for all taxpayers.

Accepted Answer

A) True 
 B)False

Question 10

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Tax [avoidance | evasion] focuses on reducing taxes in ways that are legal and compatible with the intent of Congress.

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

Buddy Slaton has only one itemized deduction item,the $3,000 he gave to his church.His standard deduction this year is $5,450,and he is in the 15% marginal tax bracket.How much will his contribution to the church save Buddy in taxes this year?

Accepted Answer

A)  $4,400 
B)  $3,000 
C)  $ 660 
D)  $ 450 
E)  $ 0 
A)  $4,400 
B)  $3,000 
C)  $ 660 
D)  $ 450 
E)  $ 0

Question 12

Anyone can legally prepare tax returns and charge a fee for that service.

Accepted Answer

A) True 
 B)False

Question 13

Diana sold mutual fund shares she had owned 4 years so that she could use the proceeds to travel across Europe with her son.Diana is in the 35% marginal tax bracket and her capital gains from this sale were $30,000.How much tax would Diana owe on those gains?

Accepted Answer

A)  $10,500 
B)  $ 8,400 
C)  $ 6,000 
D)  $ 4,500 
E)  $ 1,500 
A)  $10,500 
B)  $ 8,400 
C)  $ 6,000 
D)  $ 4,500 
E)  $ 1,500

Question 14

Which of the following cannot be adjustment(s)to gross income on the 1040 form?

Accepted Answer

A)  Health insurance premiums paid by self-employed individuals 
B)  Alimony paid 
C)  Moving expenses 
D)  Traditional IRA contributions 
E)  Child care deductions 
A)  Health insurance premiums paid by self-employed individuals 
B)  Alimony paid 
C)  Moving expenses 
D)  Traditional IRA contributions 
E)  Child care deductions

Question 15

The standard deduction in 2011 for a single filer is $5,800 and for married persons filing jointly is $11,600.

Accepted Answer

A) True 
 B)False

Question 16

Your income tax withholding is dependent on

Accepted Answer

A)  income level and deductions. 
B)  deductions and age. 
C)  income level and number of withholding allowances. 
D)  number of withholding allowances and deductions. 
E)  number of withholding allowances and dependents. 
A)  income level and deductions. 
B)  deductions and age. 
C)  income level and number of withholding allowances. 
D)  number of withholding allowances and deductions. 
E)  number of withholding allowances and dependents.

Question 17

Social security taxes are paid on earned income but not on investment income.

Accepted Answer

A) True 
 B)False

Question 18

Henry is married to Lillian,and they have two dependent children.Henry can legally file using which of the following filing statuses?

Accepted Answer

A)  Single 
B)  Married filing jointly 
C)  Head of household 
D)  Qualifying widow 
E)  Any of the above 
A)  Single 
B)  Married filing jointly 
C)  Head of household 
D)  Qualifying widow 
E)  Any of the above

Question 19

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-[Both you and your employer | Only your employer] will make social security contributions based on your wages.

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 20

A short-term capital gain would be taxed at the same rate as your salary.

Accepted Answer

A) True 
 B)False

The Congress writes and passes the Internal Revenue Code.

Portfolio-related expenses can be written off against passive income.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Tax [avoidance | evasion] is a perfectly legal practice.

Gifts received from family and friends are included in gross income.

____ income is subject to federal taxes.

Income shifting refers to the process of transferring income from the taxpayer to the IRS.

Which of the following are legal methods of reducing your current tax liability?

The federal government gets the majority of its revenue from the ____ tax.

Most major software providers have free online versions for preparing federal taxes for all taxpayers.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Tax [avoidance | evasion] focuses on reducing taxes in ways that are legal and compatible with the intent of Congress.

Buddy Slaton has only one itemized deduction item,the $3,000 he gave to his church.His standard deduction this year is $5,450,and he is in the 15% marginal tax bracket.How much will his contribution to the church save Buddy in taxes this year?

Anyone can legally prepare tax returns and charge a fee for that service.

Diana sold mutual fund shares she had owned 4 years so that she could use the proceeds to travel across Europe with her son.Diana is in the 35% marginal tax bracket and her capital gains from this sale were $30,000.How much tax would Diana owe on those gains?

Which of the following cannot be adjustment(s)to gross income on the 1040 form?

The standard deduction in 2011 for a single filer is $5,800 and for married persons filing jointly is $11,600.

Your income tax withholding is dependent on

Social security taxes are paid on earned income but not on investment income.

Henry is married to Lillian,and they have two dependent children.Henry can legally file using which of the following filing statuses?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -[Both you and your employer | Only your employer] will make social security contributions based on your wages.

A short-term capital gain would be taxed at the same rate as your salary.

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

The Congress writes and passes the Internal Revenue Code.

Portfolio-related expenses can be written off against passive income.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Tax [avoidance | evasion] is a perfectly legal practice.

Gifts received from family and friends are included in gross income.

____ income is subject to federal taxes.

Income shifting refers to the process of transferring income from the taxpayer to the IRS.

Which of the following are legal methods of reducing your current tax liability?

The federal government gets the majority of its revenue from the ____ tax.

Most major software providers have free online versions for preparing federal taxes for all taxpayers.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Tax [avoidance | evasion] focuses on reducing taxes in ways that are legal and compatible with the intent of Congress.

Buddy Slaton has only one itemized deduction item,the $3,000 he gave to his church.His standard deduction this year is $5,450,and he is in the 15% marginal tax bracket.How much will his contribution to the church save Buddy in taxes this year?

Anyone can legally prepare tax returns and charge a fee for that service.

Diana sold mutual fund shares she had owned 4 years so that she could use the proceeds to travel across Europe with her son.Diana is in the 35% marginal tax bracket and her capital gains from this sale were $30,000.How much tax would Diana owe on those gains?

Which of the following cannot be adjustment(s)to gross income on the 1040 form?

The standard deduction in 2011 for a single filer is $5,800 and for married persons filing jointly is $11,600.

Your income tax withholding is dependent on

Social security taxes are paid on earned income but not on investment income.

Henry is married to Lillian,and they have two dependent children.Henry can legally file using which of the following filing statuses?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -[Both you and your employer | Only your employer] will make social security contributions based on your wages.

A short-term capital gain would be taxed at the same rate as your salary.

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