Question 1

Use the following two columns of items to answer the matching questions below:
-capital gains

Accepted Answer

A) interest earned from savings and debt securities 
B) forms used to report interest and deductions 
C) reportable income from any source 
D) earnings from stocks 
E) selling an asset for more than it cost 
A) interest earned from savings and debt securities 
B) forms used to report interest and deductions 
C) reportable income from any source 
D) earnings from stocks 
E) selling an asset for more than it cost

Question 2

Interest expense paid on home loans and car loans is deductible from your income tax.

Accepted Answer

A) True 
 B)False

Question 3

Stephanie,who was divorced in 2015,had filed a joint tax return with her husband in 2014.During 2015,she did not remarry and continued to maintain her home in which her three dependent children lived.In preparation of her 2015 tax return,Stephanie should file as

Accepted Answer

A)  single. 
B)  head of household. 
C)  married filing separately. 
D)  qualifying widow(er). 
A)  single. 
B)  head of household. 
C)  married filing separately. 
D)  qualifying widow(er).

Question 4

The government usually adjusts the exemptions and standard deductions amounts annually to account for inflation.

Accepted Answer

A) True 
 B)False

Question 5

If you are paying taxes at the 35% tax bracket,you should

Accepted Answer

A)  consider investing in tax free municipal bonds. 
B)  make the maximum tax deductible contribution to your company 401K. 
C)  increase the interest expenses you pay by taking loans on expensive autos instead of paying cash. 
D)  Both A and B are correct. 
A)  consider investing in tax free municipal bonds. 
B)  make the maximum tax deductible contribution to your company 401K. 
C)  increase the interest expenses you pay by taking loans on expensive autos instead of paying cash. 
D)  Both A and B are correct.

Question 6

A(n)________ offsets taxes by subtracting the full amount from the taxes owed.

Accepted Answer

The answer of A(n)________ offsets taxes by subtracting the full...

Question 7

Itemized deductions can include mortgage interest expense,state income tax expense,charitable contributions,and other employee expenses.

Accepted Answer

A) True 
 B)False

Question 8

Jake invested $800 in an IRA.If he has a 15% marginal tax rate and the contribution is tax deductible,Jake will

Accepted Answer

A)  pay $120 more in taxes. 
B)  pay $120 less in taxes. 
C)  receive no change to his tax liability. 
D)  have $800 more in adjusted gross income. 
A)  pay $120 more in taxes. 
B)  pay $120 less in taxes. 
C)  receive no change to his tax liability. 
D)  have $800 more in adjusted gross income.

Question 9

The Tax Relief Act of 2001

Accepted Answer

A)  raised the tax rates for the highest income portion of the population. 
B)  limits further the ability to contribute to retirement plans tax-free. 
C)  provided educational incentives to most taxpayers. 
D)  reduced the child care credit available to most young families. 
A)  raised the tax rates for the highest income portion of the population. 
B)  limits further the ability to contribute to retirement plans tax-free. 
C)  provided educational incentives to most taxpayers. 
D)  reduced the child care credit available to most young families.

Question 10

Erin has a tax credit of $100 and a marginal tax rate of 28 percent.Erin's income tax liability will be reduced by how much as a result of the credit?

Accepted Answer

A)  $100 
B)  $128 
C)  $28 
D)  $2,800 
A)  $100 
B)  $128 
C)  $28 
D)  $2,800

Question 11

Use the following two columns of items to answer the matching questions below:
-gross income

Accepted Answer

A) interest earned from savings and debt securities 
B) forms used to report interest and deductions 
C) reportable income from any source 
D) earnings from stocks 
E) selling an asset for more than it cost 
A) interest earned from savings and debt securities 
B) forms used to report interest and deductions 
C) reportable income from any source 
D) earnings from stocks 
E) selling an asset for more than it cost

Question 12

Use the following two columns of items to answer the matching questions below:
-tax return

Accepted Answer

A) interest earned from savings and debt securities 
B) forms used to report interest and deductions 
C) reportable income from any source 
D) earnings from stocks 
E) selling an asset for more than it cost 
A) interest earned from savings and debt securities 
B) forms used to report interest and deductions 
C) reportable income from any source 
D) earnings from stocks 
E) selling an asset for more than it cost

Question 13

Melanie,a homeowner,has mortgage interest of $3,000,real estate taxes of $1,500,and charitable contributions of $500.According to her filing status,a standard deduction of $6,300 is allowed.How much should Melanie deduct on her tax return?

Accepted Answer

A)  $5,000 
B)  $6,300 
C)  $6,700 
D)  $7,700 
A)  $5,000 
B)  $6,300 
C)  $6,700 
D)  $7,700

Question 14

If you were to receive $100,000 from a corporation,the most tax-efficient way to receive it would be as

Accepted Answer

A)  dividends. 
B)  interest. 
C)  capital gains. 
D)  salary. 
A)  dividends. 
B)  interest. 
C)  capital gains. 
D)  salary.

Question 15

Knowledge of tax laws can help you conserve your income.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not includable in gross income for Federal income tax purposes?

Accepted Answer

A)  Sales commissions 
B)  Cash you receive for painting your neighbor's house 
C)  Qualifying dividends 
D)  Municipal bond interest 
A)  Sales commissions 
B)  Cash you receive for painting your neighbor's house 
C)  Qualifying dividends 
D)  Municipal bond interest

Question 17

Qualifying dividends,interest and capital gains on assets held more than one year are taxed at what rate for most taxpayers?

Accepted Answer

A)  15% 
B)  28% 
C)  a blend of 15% and 28% 
D)  These three categories of income are not taxed at the same rates. 
A)  15% 
B)  28% 
C)  a blend of 15% and 28% 
D)  These three categories of income are not taxed at the same rates.

Question 18

Which of the following gross income is not taxable income?

Accepted Answer

A)  Health insurance reimbursements 
B)  Interest income 
C)  Dividends 
D)  Tips received 
A)  Health insurance reimbursements 
B)  Interest income 
C)  Dividends 
D)  Tips received

Question 19

The standard deduction is smallest for

Accepted Answer

A)  single filers, assuming under age 65. 
B)  head of household filers, assuming over age 65 or blind. 
C)  married filing separately, assuming over age 65 or blind. 
D)  married filing jointly, assuming under age 65. 
A)  single filers, assuming under age 65. 
B)  head of household filers, assuming over age 65 or blind. 
C)  married filing separately, assuming over age 65 or blind. 
D)  married filing jointly, assuming under age 65.

Question 20

Taxpayers can have more than the minimum amount of required income tax withheld from each pay.

Accepted Answer

A) True 
 B)False

Exam 4: Using Tax Concepts for Planning

Use the following two columns of items to answer the matching questions below: -capital gains

Interest expense paid on home loans and car loans is deductible from your income tax.

Stephanie,who was divorced in 2015,had filed a joint tax return with her husband in 2014.During 2015,she did not remarry and continued to maintain her home in which her three dependent children lived.In preparation of her 2015 tax return,Stephanie should file as

The government usually adjusts the exemptions and standard deductions amounts annually to account for inflation.

If you are paying taxes at the 35% tax bracket,you should

A(n)________ offsets taxes by subtracting the full amount from the taxes owed.

Itemized deductions can include mortgage interest expense,state income tax expense,charitable contributions,and other employee expenses.

Jake invested $800 in an IRA.If he has a 15% marginal tax rate and the contribution is tax deductible,Jake will

The Tax Relief Act of 2001

Erin has a tax credit of $100 and a marginal tax rate of 28 percent.Erin's income tax liability will be reduced by how much as a result of the credit?

Use the following two columns of items to answer the matching questions below: -gross income

Use the following two columns of items to answer the matching questions below: -tax return

Melanie,a homeowner,has mortgage interest of $3,000,real estate taxes of $1,500,and charitable contributions of $500.According to her filing status,a standard deduction of $6,300 is allowed.How much should Melanie deduct on her tax return?

If you were to receive $100,000 from a corporation,the most tax-efficient way to receive it would be as

Knowledge of tax laws can help you conserve your income.

Which of the following is not includable in gross income for Federal income tax purposes?

Qualifying dividends,interest and capital gains on assets held more than one year are taxed at what rate for most taxpayers?

Which of the following gross income is not taxable income?

The standard deduction is smallest for

Taxpayers can have more than the minimum amount of required income tax withheld from each pay.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

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