Question 1

Income tax is paid on earned income such as wages and tips.Income tax is also paid on unearned income such as interest,dividends,rental income,capital gains,and winnings.

Accepted Answer

A) True 
 B)False

Question 2

The filing status of head of household is for married taxpayers who have dependents.

Accepted Answer

A) True 
 B)False

Question 3

Nancy does her taxes herself.She filled out this portion of Schedule A below to deduct her mortgage interest of $7,310;her real estate taxes of $3,988;and her state income taxes of $4,080.What error did Nancy make?
​

Accepted Answer

The answer of Nancy does her taxes herself.She filled out...

Question 4

Jason and Lina are trying to decide whether they should get married in December or January.They have heard that there is a marriage penalty built into the federal tax system.If Jason has taxable income of $150,000 and Lina has taxable income of $90,000,determine whether they should file as single and get married in January,or move the wedding up to December so that they can file jointly.
​

Accepted Answer

The answer of Jason and Lina are trying to decide...

Question 5

Chris's taxable income is $60,709.She is married,filing jointly.What is her tax?

Accepted Answer

The answer of Chris's taxable income is $60,709.She is married,filing...

Question 6

Abraham is a single taxpayer with no dependents.He received $297 in bank interest and $1,500 for an educational expenses deduction.His charitable contributions were $2,000.
Use the information to complete the table below: Wages,tips,and other compensation: $47,513;Social Security withheld based on wages of $47,513;Medicare withheld based on wages of $47,513;federal tax withheld: $4,325;state tax withheld: $2,790.Assume $3,500 per exemption and use the tax rate for the income interval for $32,550 to $78,850 of $4,481.25 + 25% for taxable income over $32,550.
​

Accepted Answer

The answer of Abraham is a single taxpayer with no...

Question 7

What is the difference between a tax credit and a tax deduction?

Accepted Answer

The answer of What is the difference between a tax...

Question 8

The long form,also called a 1040,is the only form that a filer can use if he or she has interest income from dividends,alimony,or prize money.

Accepted Answer

A) True 
 B)False

Question 9

Cody filed as a single taxpayer and determined his taxes to be $19,671.25 using the following tax table.What was his taxable income?
​

Accepted Answer

The answer of Cody filed as a single taxpayer and...

Question 10

Look at the W-2 below.What is the total amount of federal,state,and local taxes that were withheld? ​  ​

Accepted Answer

A)  $13,830.25 
B)  $18,669.38 
C)  $19,679.38 
D)  $23,955.64

Question 11

Lynn is a single mother with two children.She qualifies to file as head of household.Her total income before deductions was $38,900 last year.Her total deductions were $11,450.Her employer withheld $3,150 from her pay for tax.Use the tax table below.How much more will Lynn owe in taxes? ​  ​

Accepted Answer

A)  $570 
B)  $563 
C)  $407 
D)  $399

Question 12

Janine rented an apartment for $900 a month.After a year,she bought a house with a monthly mortgage of $1,250.At the end of the year,she is able to deduct $4,900 in real estate taxes and $8,400 in interest.Janine's taxable income is $42,000.Using the tax schedule below,how much was she able to save on her taxes due to her home ownership? ​  ​

Accepted Answer

A)  $2,940.00 
B)  $3,101.25 
C)  $3,903.75 
D)  $6,843.75

Question 13

Brittany's W-2 reported total Medicare withholding based on wages of as $117,676.She contributed $72.07 biweekly to her FSA and 10% of each paycheck to her retirement plan.She received a 1099 from her bank for interest and dividends of $2,404 and a 1099 form in the amount of $4,600 from an employer for whom she did some consulting work.What is Brittany's adjusted gross income?

Accepted Answer

The answer of Brittany's W-2 reported total Medicare withholding based...

Question 14

Kathy and Jeff Miller have a combined income of $93,366.They have 1099 forms which report $1,200 in interest.They also have $4,922 income from rental property.They can reduce their income by $3,500.What is their adjusted gross income?

Accepted Answer

The answer of Kathy and Jeff Miller have a combined...

Question 15

Lisa is a single taxpayer whose total income before deductions is $57,392.She was able to reduce her total income by $9,347 by filing Schedule A.Use the tax rate schedule below.How much did she save using Schedule A?
​

Accepted Answer

The answer of Lisa is a single taxpayer whose total...

Question 16

The tax equation for income over $74,900 but not over $151,200 is y = 10,312.50 + 0.25(x − 74,900).Simplify the equation and explain the numerical significance of the slope and the y-intercept.

Accepted Answer

The answer of The tax equation for income over $74,900...

Question 17

An exemption is an allowable amount that reduces a person's taxable income.Examples of an exemption are the taxpayer and his or her dependents.

Accepted Answer

A) True 
 B)False

Question 18

What is the term for a Wage and Tax statement and what is its purpose?

Accepted Answer

The answer of What is the term for a Wage...

Question 19

In a progressive tax system,taxes decrease as income increases.

Accepted Answer

A) True 
 B)False

Question 20

Jennifer's employer withholds $1,500 of her pre-tax wages in a plan that Jennifer can use to pay for unreimbursed medical expenses,childcare,and parental care.What is this plan called?

Accepted Answer

A)  Individual retirement account 
B)  Flexible spending account 
C)  Deferred compensation plan 
D)  Medical spending account

Exam 6: Income Taxes

Income tax is paid on earned income such as wages and tips.Income tax is also paid on unearned income such as interest,dividends,rental income,capital gains,and winnings.

The filing status of head of household is for married taxpayers who have dependents.

Nancy does her taxes herself.She filled out this portion of Schedule A below to deduct her mortgage interest of $7,310;her real estate taxes of $3,988;and her state income taxes of $4,080.What error did Nancy make? ​

Chris's taxable income is $60,709.She is married,filing jointly.What is her tax?

What is the difference between a tax credit and a tax deduction?

The long form,also called a 1040,is the only form that a filer can use if he or she has interest income from dividends,alimony,or prize money.

Cody filed as a single taxpayer and determined his taxes to be $19,671.25 using the following tax table.What was his taxable income? ​

Look at the W-2 below.What is the total amount of federal,state,and local taxes that were withheld? ​ ​

Lynn is a single mother with two children.She qualifies to file as head of household.Her total income before deductions was $38,900 last year.Her total deductions were $11,450.Her employer withheld $3,150 from her pay for tax.Use the tax table below.How much more will Lynn owe in taxes? ​ ​

Kathy and Jeff Miller have a combined income of $93,366.They have 1099 forms which report $1,200 in interest.They also have $4,922 income from rental property.They can reduce their income by $3,500.What is their adjusted gross income?

Lisa is a single taxpayer whose total income before deductions is $57,392.She was able to reduce her total income by $9,347 by filing Schedule A.Use the tax rate schedule below.How much did she save using Schedule A? ​

The tax equation for income over $74,900 but not over $151,200 is y = 10,312.50 + 0.25(x − 74,900).Simplify the equation and explain the numerical significance of the slope and the y-intercept.

An exemption is an allowable amount that reduces a person's taxable income.Examples of an exemption are the taxpayer and his or her dependents.

What is the term for a Wage and Tax statement and what is its purpose?

In a progressive tax system,taxes decrease as income increases.

Jennifer's employer withholds $1,500 of her pre-tax wages in a plan that Jennifer can use to pay for unreimbursed medical expenses,childcare,and parental care.What is this plan called?

Nancy does her taxes herself.She filled out this portion of Schedule A below to deduct her mortgage interest of $7,310;her real estate taxes of $3,988;and her state income taxes of $4,080.What error did Nancy make?

Cody filed as a single taxpayer and determined his taxes to be $19,671.25 using the following tax table.What was his taxable income?

Look at the W-2 below.What is the total amount of federal,state,and local taxes that were withheld?

Lynn is a single mother with two children.She qualifies to file as head of household.Her total income before deductions was $38,900 last year.Her total deductions were $11,450.Her employer withheld $3,150 from her pay for tax.Use the tax table below.How much more will Lynn owe in taxes?

Lisa is a single taxpayer whose total income before deductions is $57,392.She was able to reduce her total income by $9,347 by filing Schedule A.Use the tax rate schedule below.How much did she save using Schedule A?