Tax Definitions & Terminology Quiz

What does AGI stand for?

• Adjusted Gross Income

• American Opportunity Tax Credit

• Authorized Preparer List

• Advanced Child Tax Credit

Which filing status is for unmarried or considered unmarried taxpayers?

• Married Filing Jointly

• Married Filing Separately

• Single

• Qualifying Widow or Widower

What are tax credits?

• Expenses that can be deducted from AGI

• Amounts subtracted from income to reflect dependents

• Amounts directly cut from the tax owed

• Expenses that can be claimed on Schedule A

What is earned income?

• Compensation for personal services

• Interest, dividends, and capital gains

• Income below a certain amount

• Income from a qualified IRA

What is the standard deduction?

• A fixed dollar amount subtracted from income

• Expenses that can be itemized on Schedule A

• Amounts subtracted from AGI to calculate taxable income

• A credit that reduces the tax owed

What are itemized deductions?

• Expenses that can be deducted from AGI

• Expenses that can be claimed on Schedule A

• Amounts subtracted from income to reflect dependents

• Amounts directly cut from the tax owed

What is progressive taxation?

• A tax on individuals and businesses for earned and unearned income

• A system with higher tax rates as income levels increase

• The philosophy of voluntary compliance with tax laws

• The total amount of taxes owed by an individual

What is taxable income?

• Overall income reduced by adjustments, deductions, and exemptions

• The total amount of taxes owed by an individual

• The amount directly cut from the tax owed

• Expenses that can be claimed on Schedule A

What is voluntary compliance?

• The philosophy of voluntary compliance with tax laws

• A fixed dollar amount subtracted from income

• Expenses that can be itemized on Schedule A

• A credit that reduces the tax owed

What is withholding?

• The total amount of taxes owed by an individual

• Expenses that can be deducted from AGI

• Taxes taken out of income before receiving a paycheck

• Amounts subtracted from income to reflect dependents