Exam Review December 2022 (CM)

Which of the following does the federal government spend the most tax dollars on?

• Education and agriculture

• Military, interest on debt, and health

• Transportation and veterans’ benefits

• Environment and science

Which of the following is true about state taxes?

• The federal government sets state tax rates

• States decide their sales tax percentages and what items are tax exempt

• Sales tax rates are the same in all states, but income tax rates are different

• States can choose for people to not pay federal income tax

What is not example of a paystub deduction?

• Net Pay

• Federal Tax

• State Tax

• Social Security Tax

Who is most impacted by an increase in sales tax?

• Someone who earns $10,000

• Someone who earns $25,000

• Someone who earns $100,000

• They are all equally impacted

If your total tax due is $1900 and taxable income is $38,000 what is the effective tax rate?

• 5%

• .05%

• .5%

• 50%

You owe $2680 in taxes. Your W-2 says you had $3000 withheld. What will happen?

• You get a refund of $320

• You pay $320 more in taxes

• You need to speak to your boss and get the extra $320 withheld

• Pay $320 less in taxes next year

What is a tax credit?

• reduction in total tax due after it is calculated

• reduction in taxable income before total tax due is calculated

• amount of total tax due

• $12,550

_________________ is required by _______ to get funding for Social Security & Medicare

• FICA; payroll tax

• payroll tax; FICA

• income tax; FICA

• taxable income; FICA

_______________________ indirectly reduce total tax owed by reducing taxable income.

• tax deductions

• tax credits

• taxable income

• payroll tax

The __________________________ for 2021 was $12,550 for singles and $25,100 for married people

• standard deduction

• tax deduction

• taxable income

• dependent