Reducing income taxes owed

Tax avoidance is which?

• illegal

• legal

• not at all possible

• done by reducing one's taxable income

Tax evasion is which?

• legal

• illegal

• not at all possible

• possible when people do not report income they've made

What makes something a "qualified" retirement account?

• It has qualified managers

• It qualifies for tax deferment or forgiveness

• It follows the voluntary withdraws at age 59 1/2 and mandatory at 70 1/2

• It qualifiies people to retire at age 62.

If a single taxpayer earns $35,000 and contributes $3,000 to their 401 (K), their taxes are based on what? (No other factors considered.)

• The full amount of earnings ($35,000)

• The amount of earnings minus the funds to 401(k) ($32,000)

The I-9 Form is what?

• Used to "file" one's income tax.

• An initial form to verify your citizenship and social security #

• A form used by illegal-alien's to work in the U.S.

• A form the employer produces by Jan 31st so you can file.

You go to the tax table and find on your level of income you owe $3,800 of taxes. You look at your W-2 and see that you already paid (thru employer) $3,600. This means what?

• You are entitled to a refund of the 3,600.

• You are entitled to a refund of $200.

• You owe $3,600.

• You owe $200.

Trisha filled out and signed her federal withholding form with Single 0 allowances. Riana completed it with Single 1 allowance. This means what?

• Riana will have the maximum tax taken out of her paychecks.

• Riana will have more tax taken from her.

• Trisha will have less tax taken out of her paychecks.

• Trisha will have the maximum tax taken out of her paychecks.

Complete the sentence: The ______ is for the filing status and allowance(s) for federal government while the ____________ is for New York State.

• W-2 and IT-2104

• W-4 and IT-2104

• IT-2104 and W-2

• IT-2104 and W-4

Filing income taxes is what?

• always necessary

• determining underpayment or overpayment

• done by January 31st

• writing your money in and out on paper & creating a file.

FSA stands for which?

• Future Savings Account

• Flexible Savings Account

• Flexible Spending Account

• Future Spending Account