Income and Taxes Review

Which statement best describes the relationship between a person's educational level and that person's potential earning power?

• Education has no effect on a person's potential earning power.
• A person with a professional degree is likely to earn at least four times as much per year as a person who did not complete high school.
• Attaining a higher educational level affects the earning potential only for people over 40 years old.
• Attaining a higher education level decreases potential earning power.

The total amount of earnings before any deductions are taken out

• Gross Pay
• Net Pay
• After-tax Income
• Yucky Pay

The amount of salary received after taxes and deductions

• Gross Pay
• Net Pay
• Total Earnings
• Bill 

With-holdings from paychecks that go to provide income support for people who are unemployed, disabled, or over age 65

• 401k
• Social Security
• Medicare
• Medicaid

Bruce makes $100,000 per year.
Steve makes $50,000 per year.
Tony makes $30,000 per year.  
Bruce pays 30% in taxes, Steve pays 20%, and Tony pays 10%.  This tax is

• Proportional
• Progressive
• Regressive
• I have no idea.

What form is used by your employer to allow them to withhold taxes from your paycheck?

• I-9
• W-2
• W-4
• 1040EZ

The primary sources of income for young people between 18 and 30 who are not living on a pension (retirement) or social security are?

• Profits from businesses they own.
• Dividends and interest from investments
• Rents
• Wages, Salaries, and Tips

Which of the following is an example of unearned income?

• Money earned from waiting tables.
• The tax return you receive from the government after filing you 1040EZ.
• Money from a salary job such as a professional athlete.
• Money earned on interest from a savings account.

 Which of the following should you  consider when making a choice about a university or college to attend?

• Location of College
• Average debt of a student
• Cost of attending that college
• All of the above

A W-4 is given to you by an employer...

• True
• False