FA Unit 1 Test: Taxes & Fundamentals of Algebra Part 1

Kiki receives a paycheck for 15 hours of work at a rate of $20 per hour. Her paystub lists 401(k) withholdings of $40, FICA of $20, federal income taxes of $26, and a healthcare payment of $8. What is Kiki's net pay?

• $206

• $254

• $300

• $394

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

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

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

Who should consider completing a W-4 form?

• Aaliyah, who wants to enroll in her company's 401(k) program for the first time

• Bruno, who just adopted a baby and wants to adjust his tax withholdings

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

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

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

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

What statement is true about standard and itemized personal deductions?

• The standard deduction is always more than itemized personal deductions

• Itemized personal deductions are always more than the standard deduction

• You can take either the standard or itemized personal deductions, but not both

• The standard deduction is refundable but itemized personal deductions are not

Georgia completed her taxes and found that she owes $1,941 in federal taxes. If her taxable income for the year was $16,175, what is her effective tax rate?

• 10%

• 18%

• 22%

• 12%

James received his W-2. How much did he pay in federal and FICA taxes combined?

• $1,576.20

• $2,861.30

• $4,437.50

• $4,962.93