Unit 6 Taxes & Insurance Test

What is a tax deduction?

• This reduces your taxable income

• A direct reduction of the tax owed

• A fixed amount everyone is entitled to deduct

• A penalty for not paying enough taxes throughout the year

Which tax form is typically used by individuals to file their annual income tax returns?

• Form 1040

• Form W-2

• Form 1099

• Form W-4

How does a deductible work in an insurance policy?

• It is the amount you pay before your insurance policy begins to pay

• It is the maximum amount the insurance company will pay

• It is a discount given at the time of purchasing a policy

• It is the amount refunded after a claim is processed

What is a tax credit?

• A direct reduction in the amount of taxes owed to the IRS

• A reduction in taxable income

• A fixed amount everyone gets regardless of their income

• A penalty for underpayment of taxes

Liability insurance in a car insurance policy covers:

• Damage to your own vehicle

• Injuries to yourself

• Damage or injuries you cause to others

• Theft of personal items from your car

What form do employers provide to their employees, showing the total income earned and taxes withheld for the year?

• Form 1040

• Form W-2

• Form 1099

• Claim

I determine how much money is withheld from your paycheck for income taxes. Who am I?

• W-2 form

• I-9 form

• W-4 form

• 1040 form

When are you required to file your taxes?

• When you turn 18

• When you make more than the minimum income requirement for a single-filer

• When you get a full-time job (part-time dose not count)

• When you are notified by the IRS that you are required to pay federal income taxes

When you complete your 1040 form, if you overpaid your taxes and the government owes you money, that is called a _____.

• withholding

• direct deposit

• deduction

• refund

A formal request to an insurance company asking for a payment when the policyholder has an accident, illness, or injury

• premium

• coverage limit

• claim
• Deductible