SJLA: PF - Unit 1 Test: Taxes

1. Each of these is a common payroll deduction EXCEPT…

• Office supplies and equipment
• Federal income taxes
• FICA
• Health insurance plan

2. Kiki receives a paycheck for 20 hours of work at a rate of $20 per hour. Her paystub lists 401(k) withholdings of $50, FICA of $25, federal income taxes of $17, and a healthcare payment of $9. What is Kiki’s net pay?

• $399
• $299
• $400
• $501

3. Which expenditures make up the greatest share of state spending?

• Education and health care
• Transportation and corrections
• Low-income assistance and pensions
• Environmental programs and parks

4. Lamar made $92,000 as a data analyst his first year out of college. He calculated his above-the-line deductions to be $5,500, his itemized deductions to be $7,000, and the standard deduction is $12,950. What deductions is Lamar allowed to take that will minimize his taxes owed?

• He can take all three for $25,450 in deductions

• He can take the $7,000 and the $12,950 for $19,950 in deductions

• He can take the $5,500 and the $12,950 for $18,450 in deductions

• He can take the $5,500 and the $7,000 for $12,500 in deductions

5. Maricela calculated that she owes $2,493 in federal taxes after all deductions and credits. Her W-2 states that $2,670 was withheld in federal tax. This means that Maricela…

• Has to pay $177 in taxes owed
• Will receive a refund of $177
• Will pay $177 less in taxes next year since she overpaid this year
• Should speak to her employer to get the $177 in extra taxes that they withheld

6. Which statement best describes the difference between being paid a wage versus being paid a salary?

• A wage is an hourly rate below $20 per hour, while a salary is an hourly rate above $20 per hour
• A wage is paid based on how many hours you work, while a salary is a fixed amount paid regardless of the number of hours
• A wage is paid every two weeks, while a salary is paid monthly
• A wage is paid to part-time employees, while a salary is paid to full-time employees

7. Who should consider completing a W-4 form?

• Aaliyah, who wants to enroll in her company’s 401(k) program for the first time
• Noah, who just got married and wants to adjust his tax withholdings.

• Bruno, who is considering a career change and wants to update his resume

• Denise, who doesn’t like her company’s health insurance plan options

8. Which of the following is true about state taxes?

• The federal government determines state tax rates
• States can levy property taxes and sales taxes, but not income taxes
• Sales tax rates are the same in all states, but income tax rates are different
• The largest state programs funded by state taxes are education and healthcare

9. Payroll taxes are different from income taxes in all of the following ways, EXCEPT…

• Payroll taxes are regressive, while income taxes are progressive
• Payroll taxes are based on your wages and salary, while income taxes are based on all your forms of income
• Payroll taxes fund the Social Security and Medicare programs, while income taxes fund government programs more broadly
• Payroll tax rates scale upward with income, while income taxes are a flat rate across all earning levels

10. The graph shows a hypothetical tax rate as a function of income. Which of the following statements about the graph is true?

• The tax is progressive
• The tax is regressive
• The tax is proportional
• The tax collects the same dollar amount from all earners