Exam 3: Preparing Your Taxes

You have owned and lived in your home for 8 years.Now you have received an excellent promotion,but you will have to sell your home and move to another community.You expect to realize a capital gain of $100,000 on the home's sale.The capital gain will

A declaration of estimated taxes is made by filing

You would typically not include ____ in your gross income.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The IRS definition of [gross | adjusted] income is "all income that is subject to federal taxes."

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -[Both you and your employer | Only your employer] will make social security contributions based on your wages.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The highest marginal tax rate is currently [39.6% | 28%].

Tax credits are dollar-for-dollar reductions in taxes due.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The terms "tax free" and "tax deferred" [do | do not] mean the same thing.

Marci has taxable income of $50,000.She is single and her tax rates are 10% on the first $9,075 of taxable income,15% of the amount over $9,075 up to $36,900 of taxable income,and 25% on the remainder.What is Marci's tax liability,her marginal tax rate,and her average tax rate? (Show all work.)

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Your marital status [will | will not] have an effect on the amount of social security tax you pay.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Tax planning is [confined to the first quarter of the year | a year-round activity].

A capital gain is the result of

If you earn less than $15,000,you probably pay more in social security taxes than in federal income taxes.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The tax year corresponds to the [April 15 filing deadline | calendar year].

Your take-home pay is what you are left with after subtracting withholdings from your

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.

Tax avoidance is legal,tax evasion is illegal.

Alimony received is included in gross income for the receiver and deducted from gross income for the payer.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -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.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -A tax credit is subtracted from your [taxable income | tax liability].