Question 1

____ income is gross income less tax deductions and payments for insurance and retirement savings.

Accepted Answer

A) Take-home 
B) EBIT 
C) Adjusted gross 
D) Taxable 
E) Tax-exempt 
A) Take-home 
B) EBIT 
C) Adjusted gross 
D) Taxable 
E) Tax-exempt

Question 2

All major software providers have online versions for preparing federal taxes. This software is

Accepted Answer

A) free to all tax filers 
B) free to qualified tax filers 
C) for a fee for all tax filers 
D) available on a free trial to all tax filers 
E) available on a free trial to qualified tax filers 
A) free to all tax filers 
B) free to qualified tax filers 
C) for a fee for all tax filers 
D) available on a free trial to all tax filers 
E) available on a free trial to qualified tax filers

Question 3

There is no limit on the amount of social security tax withheld annually.

Accepted Answer

A) True 
 B)False

Question 4

The Internal Revenue Service is responsible for making changes to the federal income tax codes.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following can 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) a and b only 
E) a, b, and c 
A) Health insurance premiums paid by self-employed individuals 
B) Alimony paid 
C) Moving expenses 
D) a and b only 
E) a, b, and c

Question 6

Maria and Ed just sold their home of 20 years so that they could purchase a smaller home.They realized a $400,000 capital gain on the home.On how much of this gain will Maria and Ed have to pay taxes?

Accepted Answer

A) $400,000 
B) $300,000 
C) $250,000 
D) $100,000 
E) $0 
A) $400,000 
B) $300,000 
C) $250,000 
D) $100,000 
E) $0

Question 7

Mortgage interest and paid home property taxes are both itemized deduction items.

Accepted Answer

A) True 
 B)False

Question 8

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.
-If you pay a professional to prepare your taxes,any errors on the return will be [your | the preparer's] responsibility.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Child support received is included in gross income.

Accepted Answer

A) True 
 B)False

Question 11

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.
-[All | Some] of your medical expenses during the year could be taken as an itemized deduction.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 12

From the information given below,determine Steve's gross income for tax purposes:
$\begin{array}{lr}
\text { Salary } & \$ 32,000 \
\text { Interest (checking account) } & 25 \
\text { Cash received as birthday gift } & 1,000\\text { Dividends (mutual funds) } & 5,500 \
\text { Child support payments received from ex-wife } & 24,000 \
\text { Life insurance benefits received from aunt's death } & 50,000\
\end{array}$

Accepted Answer

$32,000 +

Question 13

A spouse and spouse is the only couple combination that can file a joint return.

Accepted Answer

A) True 
 B)False

Question 14

If you are married,you can legally file a single tax return.

Accepted Answer

A) True 
 B)False

Question 15

Tax credits reduce your

Accepted Answer

A) tax liability. 
B) adjusted gross income. 
C) tax refund. 
D) tax withholding. 
E) taxable income. 
A) tax liability. 
B) adjusted gross income. 
C) tax refund. 
D) tax withholding. 
E) taxable income.

Question 16

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 would result from [an IRA contribution | child care expenses].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 17

The income-shifting tax strategy is least effective when income-producing gifts are given to persons

Accepted Answer

A) over age 65. 
B) over age 50. 
C) under age 19. 
D) under age 25. 
E) Age is not an issue. 
A) over age 65. 
B) over age 50. 
C) under age 19. 
D) under age 25. 
E) Age is not an issue.

Question 18

Most any wage earner can open an IRA and contribute up to $7,500 of tax-deferred income each year to the account.

Accepted Answer

A) True 
 B)False

Question 19

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 lowest marginal tax rate is currently [10% | 15%].

Accepted Answer

The answer of Choose the word or phrase in [...

____ income is gross income less tax deductions and payments for insurance and retirement savings.

All major software providers have online versions for preparing federal taxes. This software is

There is no limit on the amount of social security tax withheld annually.

The Internal Revenue Service is responsible for making changes to the federal income tax codes.

Which of the following can be adjustment(s)to gross income on the 1040 form?

Maria and Ed just sold their home of 20 years so that they could purchase a smaller home.They realized a $400,000 capital gain on the home.On how much of this gain will Maria and Ed have to pay taxes?

Mortgage interest and paid home property taxes are both itemized deduction items.

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

Child support received is included in 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. -[All | Some] of your medical expenses during the year could be taken as an itemized deduction.

A spouse and spouse is the only couple combination that can file a joint return.

If you are married,you can legally file a single tax return.

Tax credits reduce your

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 would result from [an IRA contribution | child care expenses].

The income-shifting tax strategy is least effective when income-producing gifts are given to persons

Most any wage earner can open an IRA and contribute up to $7,500 of tax-deferred income each year to the account.

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 lowest marginal tax rate is currently [10% | 15%].

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

____ income is gross income less tax deductions and payments for insurance and retirement savings.

All major software providers have online versions for preparing federal taxes. This software is

There is no limit on the amount of social security tax withheld annually.

The Internal Revenue Service is responsible for making changes to the federal income tax codes.

Which of the following can be adjustment(s)to gross income on the 1040 form?

Maria and Ed just sold their home of 20 years so that they could purchase a smaller home.They realized a $400,000 capital gain on the home.On how much of this gain will Maria and Ed have to pay taxes?

Mortgage interest and paid home property taxes are both itemized deduction items.

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

Child support received is included in 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. -[All | Some] of your medical expenses during the year could be taken as an itemized deduction.

A spouse and spouse is the only couple combination that can file a joint return.

If you are married,you can legally file a single tax return.

Tax credits reduce your

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 would result from [an IRA contribution | child care expenses].

The income-shifting tax strategy is least effective when income-producing gifts are given to persons

Most any wage earner can open an IRA and contribute up to $7,500 of tax-deferred income each year to the account.

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 lowest marginal tax rate is currently [10% | 15%].

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