Exam 4: Using Tax Concepts for Planning

A dollar's worth of tax credits is more valuable than a dollar's worth of deductions.

When taxable income exceeds certain levels,the itemized deductions and exemptions

Which of the following is not a tax filing status option?

Legal methods of reducing your taxes include all of the following except

Purchasing which of the following items on credit will help reduce your tax bill?

Under the Affordable Care Act of 2010,if an individual does not have medical insurance coverage in 2016,they will

All medical expenses may be deducted from income as long as you have the receipts or can show proof of payment.

Christopher is a single college student and earns $13,000 from a part-time job.He has taxable interest income of $1,400 and itemized deductions of $690.Calculate Christopher's taxable income for 2015 assuming his parents do not claim him as a dependent on their tax return.

Knowledge of individual income taxes is crucial to sound financial planning.

Lucky Louie's base salary is $90,000 per year and he earns an additional $75,000 in annual bonus.Luckily,Lucky only has to pay FICA on

If you have a salary of $30,000,an IRA deduction of $2,000,a standard deduction of $6,300,and a FICA rate of 7.65 percent,how much did you pay in FICA this year?

If you are working part time while going to school and have no dependents other than yourself,do not itemize deductions and have no capital asset transactions,which Federal Income Tax return form should you file?

________ are specific expenses instead of a standard amount that reduce adjusted gross income.

Jerry is divorced and has two children that live with him.In addition he baby-sits three other children in the evenings and has a cat and two dogs.How many exemptions can he claim on his tax return?

FICA taxes include two components,which consist of

A allowable amount which taxpayers can claim for themselves and dependents is called a(n)

Enrico and his wife have combined salaries of $85,000.They have interest and dividends on their investments of $1,000 and annually contribute a combined $3,000 to a traditional IRA.The interest on their home mortgage is $2,500,they contributed $1,000 to their church,and incurred medical expenses not covered by insurance of $1,800.Assuming they can claim two personal exemptions of $4,000 each and file joint tax returns,compute their tax liability for 2015.

Comment on your level of knowledge to prepare your taxes.Do you need to hire a CPA or can you prepare them? Are you going to invest in any software that helps you prepare your return?

Jane purchased General Motors stock seven years ago for $20,000.In 2015,she sold the stock for $35,000.What is Jane's gain or loss?

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