Question 1

Which one of these investments produces tax-exempt income?

Accepted Answer

A)  Real estate
B)  Corporate stock
C)  Retirement plan
D)  Municipal bond
E)  Corporate bondF) C) and D)
G) B) and D)

Question 2

Examples of tax credits do not include a/an ________ tax credit.

Accepted Answer

A)  energy-savings
B)  adoption
C)  elderly and disabled
D)  credit card
E)  saversF) B) and D)
G) A) and D)

Question 3

Cameron Nelson wants to complete his own federal income tax return.He has several questions about the tax form to use and what items should be reported as income.What sources of assistance would you recommend for Cameron?

Accepted Answer

Answers will vary.The IRS offers taxpaye...

Question 4

John Williams goes into a local department store and purchases a new suit.He pays $48 in taxes on this purchase.What type of tax is this most likely to be?

Accepted Answer

A)  General sales tax
B)  Excise tax
C)  Personal property tax
D)  Income tax
E)  Estate taxF) B) and D)
G) B) and E)

Question 5

An expense that would be included in the itemized deductions of a taxpayer is:

Accepted Answer

A)  personal postage expenses.
B)  life insurance premiums.
C)  real estate property taxes.
D)  retirement plan contributions.
E)  annual interest paid on credit cards.F) B) and C)
G) All of the above

Question 6

Two types of education savings plans are the Coverdell Education Savings Account and the:

Accepted Answer

A)  401(k) .
B)  529 plan.
C)  Keogh plan.
D)  Traditional IRA.
E)  Roth IRA.F) All of the above
G) None of the above

Question 7

What is the difference between tax-exempt income and tax-deferred income?

Accepted Answer

Tax exempt income is...

Question 8

An excise tax is imposed by the federal and state governments on all of the following specific goods,except:

Accepted Answer

A)  clothing.
B)  gasoline.
C)  cigarettes.
D)  tires.
E)  air travel.F) All of the above
G) C) and E)

Question 9

Kim Lee is single and earns $32,000 in taxable income.He uses the following tax rate schedule to calculate the taxes he owes.  Calculate the dollar amount of estimated taxes that Kim owes.

Accepted Answer

A)  $3,200.00
B)  $3,649.50
C)  $3,840.00
D)  $7,040.00
E)  $7,680.00F) C) and E)
G) B) and E)

Question 10

An estate tax is imposed on the value of an individual's property at the time of his or her death.

Accepted Answer

A) True 
 B)False

Question 11

Which one of the following would reduce gross income to obtain adjusted gross income?

Accepted Answer

A)  IRA contributions
B)  Mortgage interest
C)  Medical expenses
D)  Moving expenses
E)  Charitable contributionsF) A) and B)
G) All of the above

Question 12

Which one of the following is a retirement plan that allows a $5,500 annual contribution with tax-free earnings after five years?

Accepted Answer

A)  Roth IRA
B)  Education Savings Account
C)  Keogh Plan
D)  401(k) Plan
E)  529 PlanF) B) and D)
G) B) and E)

Question 13

The interest is deductible on your tax return for which of the following?

Accepted Answer

A)  Home equity loan
B)  Auto loan
C)  Credit card
D)  Life insurance policy cash value loan
E)  Personal cash loan from a credit unionF) C) and E)
G) All of the above

Question 14

What sources are available for professional tax assistance?

Accepted Answer

The sources available for professional t...

Question 15

________ may involve an official-looking (but phony) letter or e-mail sent to a taxpayer to trick them into disclosing personal information and bank account numbers by stating that the taxpayer is entitled to a tax refund from the IRS.

Accepted Answer

A)  Phishing
B)  Office audits
C)  Field audits
D)  Correspondence audits
E)  Tax solicitationsF) B) and C)
G) A) and B)

Question 16

Money received in the form of dividends or interest is classified as ________ income.

Accepted Answer

A)  passive
B)  earned
C)  excluded
D)  capital gain
E)  investmentF) B) and C)
G) A) and E)

Exam 4: Planning Your Tax Strategy

Kim Lee is single and earns $32,000 in taxable income.He uses the following tax rate schedule to calculate the taxes he owes. Calculate the dollar amount of estimated taxes that Kim owes.

Correct Answer
verified

An estate tax is imposed on the value of an individual's property at the time of his or her death.

Correct Answer
verified

Examples of tax credits do not include a/an ________ tax credit.

Correct Answer
verified

Two types of education savings plans are the Coverdell Education Savings Account and the:

Correct Answer
verified

________ may involve an official-looking (but phony) letter or e-mail sent to a taxpayer to trick them into disclosing personal information and bank account numbers by stating that the taxpayer is entitled to a tax refund from the IRS.

Correct Answer
verified

Which one of the following would reduce gross income to obtain adjusted gross income?

Correct Answer
verified

What is the difference between tax-exempt income and tax-deferred income?

Correct Answer
verified
Tax exempt income is...
View Answer

John Williams goes into a local department store and purchases a new suit.He pays $48 in taxes on this purchase.What type of tax is this most likely to be?

Correct Answer
verified

Money received in the form of dividends or interest is classified as ________ income.

Correct Answer
verified

Which one of the following is a retirement plan that allows a $5,500 annual contribution with tax-free earnings after five years?

Correct Answer
verified

What sources are available for professional tax assistance?

Correct Answer
verified
The sources available for professional t...
View Answer

Cameron Nelson wants to complete his own federal income tax return.He has several questions about the tax form to use and what items should be reported as income.What sources of assistance would you recommend for Cameron?

Correct Answer
verified
Answers will vary.The IRS offers taxpaye...
View Answer

An excise tax is imposed by the federal and state governments on all of the following specific goods,except:

Correct Answer
verified

The interest is deductible on your tax return for which of the following?

Correct Answer
verified

An expense that would be included in the itemized deductions of a taxpayer is:

Correct Answer
verified

Which one of these investments produces tax-exempt income?

Correct Answer
verified

Exam 4: Planning Your Tax Strategy

Kim Lee is single and earns $32,000 in taxable income.He uses the following tax rate schedule to calculate the taxes he owes. Calculate the dollar amount of estimated taxes that Kim owes.

Correct AnswerverifiedShow Answer

An estate tax is imposed on the value of an individual's property at the time of his or her death.

Correct AnswerverifiedShow Answer

Examples of tax credits do not include a/an ________ tax credit.

Correct AnswerverifiedShow Answer

Two types of education savings plans are the Coverdell Education Savings Account and the:

Correct AnswerverifiedShow Answer

________ may involve an official-looking (but phony) letter or e-mail sent to a taxpayer to trick them into disclosing personal information and bank account numbers by stating that the taxpayer is entitled to a tax refund from the IRS.

Correct AnswerverifiedShow Answer

Which one of the following would reduce gross income to obtain adjusted gross income?

Correct AnswerverifiedShow Answer

What is the difference between tax-exempt income and tax-deferred income?

Correct AnswerverifiedTax exempt income is...View AnswerShow Answer

John Williams goes into a local department store and purchases a new suit.He pays $48 in taxes on this purchase.What type of tax is this most likely to be?

Correct AnswerverifiedShow Answer

Money received in the form of dividends or interest is classified as ________ income.

Correct AnswerverifiedShow Answer

Which one of the following is a retirement plan that allows a $5,500 annual contribution with tax-free earnings after five years?

Correct AnswerverifiedShow Answer

What sources are available for professional tax assistance?

Correct AnswerverifiedThe sources available for professional t...View AnswerShow Answer

Cameron Nelson wants to complete his own federal income tax return.He has several questions about the tax form to use and what items should be reported as income.What sources of assistance would you recommend for Cameron?

Correct AnswerverifiedAnswers will vary.The IRS offers taxpaye...View AnswerShow Answer

An excise tax is imposed by the federal and state governments on all of the following specific goods,except:

Correct AnswerverifiedShow Answer

The interest is deductible on your tax return for which of the following?

Correct AnswerverifiedShow Answer

An expense that would be included in the itemized deductions of a taxpayer is:

Correct AnswerverifiedShow Answer

Which one of these investments produces tax-exempt income?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Tax exempt income is...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The sources available for professional t...
View Answer

Correct Answer
verified
Answers will vary.The IRS offers taxpaye...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified