Exam 3: Preparing Your 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. -Interest you paid on your [car | house] loan could be deducted.

Who would be most likely to have to pay estimated 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].

The Internal Revenue Service is responsible for writing the federal income tax codes.

From the information given below,determine Marcie's gross income for tax purposes:

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. -Dividends received from stocks are known as [passive | portfolio] income.

The tax year begins at April 16 and ends at April 15,the usual filing deadline.

The federal personal income tax is a progressive tax.

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 date by which your tax liability must be paid in order to avoid late payment penalties and/or interest is [April 15 | August 15].

A person with a significant amount of investment income would have a high probability of needing to make estimated tax payments.

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 higher your income,the [greater | smaller] the probability you will be audited.

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% | 12%].

Exemptions are tax deductions from adjusted gross income based on the number of persons supported by the taxpayer's 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."

All major software providers have online versions for preparing federal taxes.This softwares are:

The standard deduction in 2013 for a single filer is $6,100 and for married people filing jointly is $12,200.

The alternative minimum tax is an issue only for high-income taxpayers.

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. -You are single with no dependents,age 30.Based on this information,you [could | could not] use the 1040EZ.

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. -Earnings from real estate investments are an example of [active | passive] income.

Hector is a single taxpayer in the 28% marginal tax bracket.In 2013,he sold stock shares,which he held for 36 months,for a capital gain of $8,500.He also sold some financial services stock,which he held for 14 months,for a capital loss of $2,000.In addition,he sold the home that he had lived in for the past 3 years and experienced a $15,000 gain on the house.How much will his net capital gains (or losses)be for 2013? How much will he pay (or save)in taxes as a result of these transactions?