Question 1

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

Question 2

You should itemize deductions when total itemized deductions are less than the standard deduction.

Accepted Answer

A) True 
 B)False

Question 3

Most states generate the majority of their revenues from property taxes.

Accepted Answer

A) True 
 B)False

Question 4

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-When matching Social Security contributions,employers pay [the same | a lesser] amount of Social Security taxes as/than the employee.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 5

Ben and Jack both earned $60,000 this year.Ben (age 30)is married with two children,and Jack (age 68)is single with no dependents.Which of the following is true regarding the amount of Social Security taxes they will pay?

Accepted Answer

A)  They will pay the same amount of Social Security taxes. 
B)  Ben will pay less Social Security taxes because he is married. 
C)  Ben will pay less Social Security taxes because he has children. 
D)  Jack will pay less Social Security taxes because he is single. 
E)  Jack will pay less Social Security taxes because he is over age 65.

Question 6

Local governments get most of their tax revenue from

Accepted Answer

A)  property taxes. 
B)  sales taxes. 
C)  licensing fees. 
D)  excise taxes. 
E)  income taxes.

Question 7

Child support received is included in gross income.

Accepted Answer

A) True 
 B)False

Question 8

One's average tax rate is typically lower than one's marginal tax rate.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)  gross earnings. 
B)  net earnings. 
C)  taxable income. 
D)  adjusted gross income. 
E)  tax exempt income.

Question 10

A special tax provision reduced the social security portion for the individual taxpayer by 2% in 2011 and 2012.

Accepted Answer

A) True 
 B)False

Question 11

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The IRS definition of [gross | adjusted] income is "all income that is subject to federal taxes."

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 12

Jamie has taxable income of $45,000.She is single and her tax rates are 10% on the first $7,000 of taxable income,15% of the amount over $7,000 up to $28,400 of taxable income and 25% on the remainder.What is Jamie's tax liability,her marginal tax rate,and her average tax rate?

Accepted Answer

The answer of Jamie has taxable income of $45,000.She is...

Question 13

If you are eligible to receive a tax refund,you will have to file a tax return to get the refund.

Accepted Answer

A) True 
 B)False

Question 14

An investment must be owned over two years in order to qualify for long-term capital gains treatment.

Accepted Answer

A) True 
 B)False

Question 15

A husband and wife would be the only couple combination that could file a joint return.

Accepted Answer

A) True 
 B)False

Question 16

The main objective of tax planning is to maximize the amount of money you keep by minimizing the amount of taxes you pay.

Accepted Answer

A) True 
 B)False

Question 17

The federal income tax is

Accepted Answer

A)  integrative. 
B)  regressive. 
C)  progressive. 
D)  flat rate. 
E)  none of the above.

Question 18

Municipal bond investments typically provide tax-free interest income.

Accepted Answer

A) True 
 B)False

Question 19

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-A special tax provision reduced the social security portion for the individual taxpayer in 2011 and 2012 from [6.2% to 4.2% | 4.2% to 2.2%].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 20

When a child qualifies as a dependent on her parent's return,the child cannot take a personal exemption for herself.

Accepted Answer

A) True 
 B)False

Exam 3: Preparing Your Taxes

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

You should itemize deductions when total itemized deductions are less than the standard deduction.

Most states generate the majority of their revenues from property taxes.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -When matching Social Security contributions,employers pay [the same | a lesser] amount of Social Security taxes as/than the employee.

Ben and Jack both earned $60,000 this year.Ben (age 30) is married with two children,and Jack (age 68) is single with no dependents.Which of the following is true regarding the amount of Social Security taxes they will pay?

Local governments get most of their tax revenue from

Child support received is included in gross income.

One's average tax rate is typically lower than one's marginal tax rate.

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

A special tax provision reduced the social security portion for the individual taxpayer by 2% in 2011 and 2012.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The IRS definition of [gross | adjusted] income is "all income that is subject to federal taxes."

Jamie has taxable income of $45,000.She is single and her tax rates are 10% on the first $7,000 of taxable income,15% of the amount over $7,000 up to $28,400 of taxable income and 25% on the remainder.What is Jamie's tax liability,her marginal tax rate,and her average tax rate?

If you are eligible to receive a tax refund,you will have to file a tax return to get the refund.

An investment must be owned over two years in order to qualify for long-term capital gains treatment.

A husband and wife would be the only couple combination that could file a joint return.

The main objective of tax planning is to maximize the amount of money you keep by minimizing the amount of taxes you pay.

The federal income tax is

Municipal bond investments typically provide tax-free interest income.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -A special tax provision reduced the social security portion for the individual taxpayer in 2011 and 2012 from [6.2% to 4.2% | 4.2% to 2.2%].

When a child qualifies as a dependent on her parent's return,the child cannot take a personal exemption for herself.