Exam 4: Using Tax Concepts for Planning

The highest tax rate a taxpayer is charged on his or her federal tax return is called the ________ rate.

Only the income that remains after deductions and exemptions are subtracted from adjusted gross income is taxable.

Lucky Louie earned $100,000 salary this year,had total itemized deductions of $10,000,one personal exemption equal to $4,000 and interest income of $3,000.Louie,was not so lucky in the stock market however and had capital losses of $8,000. What was Lucky Louie's taxable income?

Gross income and adjusted gross income can be the same if you do not have any special adjustments.Which of the following is not one of these special adjustments?

Reductions of gross income for such items as individual retirement accounts (IRAs),moving expenses,and student loan interest payments will result in

If you are a married taxpayer,you may use the ________ filing status.

If you sell an asset that you owned for less than 12 months for more than you paid for it,you will report a(n)________.

Employers have an option of whether or not to match an employee's Social Security and Medicare taxes.

Income earned from the sale of an asset for more than you paid for it is classified as a(n)

All reportable income from any source is called

Describe how taxes affect your personal budget,income statement,and balance sheet.

Which of the following is the correct method for starting with gross income and computing taxable income?

Which tax form is generally used by taxpayers whose filing status is married,has no dependents,and whose taxable income if less than $100,000?

Different tax rates are associated with each filing status such as single,married filing jointly,and head of household.

________ and ________ are both reported on a Schedule B.

Medicare taxes are 1.45% of your salary,regardless of the salary amount.

Which of the following is not an acceptable method of reducing your tax bill?

The standard deduction (assuming you are not over 65 or blind)is largest for

All taxpayers have a choice of whether to take the standard deduction or itemize deductions.

George is 65 years old.He supports his father who is 90 years old,blind,and has no income.How many exemptions should George claim on his tax return?