Tax Test

Mandatory government spending includes which of the following?

• Infrastructure and science

• Social Security and Medicare

• Healthcare and military

• Education and agriculture

What does the term "withholding" mean in reference to your paycheck?

• The amount of your paycheck that you are NOT being taxed on

• How much you are going to owe the government when you file your annual tax return

• How much you earn and includes salary, bonus and commissions

• How much is being taken out of your paycheck for things like taxes, employer sponsored health insurance, and retirement

Marquis is starting a fast food job during his senior year of high school. He lives with his parents and they will claim him as a dependent on their taxes this year. He earns $2000. Based on how he completed his W-4, his employer withheld $200 in federal income taxes from his paychecks. What will happen if Marquis doesn't file taxes in April?

• Nothing will happen, but Marquis will miss out on his potential refund

• The IRS will fine Marquis $75 or more for not filing taxes

• The IRS will refund his $200 to his parents

• The IRS will refund his $200 directly to him

All of the following people would be required to file a tax return EXCEPT…

• Dani, who is a cafe barista and earned $13,000 in wages and $250 in tips

• Isaiah, who owns his own business and generated an income of $7,000

• Max, whose total income from three separate part-time jobs was $9,500

• Janet, who earned $28,200 but was paid entirely in cash

Akshay worked at a cafe while he was a college senior in Boston, Massachusetts. After graduating in June, he moved back to his home in California and started a full-time job in September. Which of the following statements is true?

• Akshay will need to file a federal tax return this year and file state returns the following year

• Akshay will need to file a federal tax return and a state tax return for both Massachusetts and California

• Akshay will need to file a federal tax return and a state tax return for Massachusetts

• Akshay will need to file only a federal tax return

Which of the following statements about the W-2 form is TRUE?

• The W-2 includes information about the interest you earned from your investments

• The total wages you earned from ALL jobs you worked in the previous year appear on ONE W-2 form

• A W-2 lists all the money you earned in cash over the last year

• You need a separate W-2 form from EACH of your employers in order to file your taxes

If a taxpayer fills out their W-4 in a way that does not withhold enough money to cover their tax obligation, what is the most likely outcome after they file their taxes?

• They will be charged with tax evasion

• They will be audited

• They will owe a payment to the IRS

• They will receive a refund

Which of the following describes what a "dependent" is for tax purposes?

• Someone who is a full-time student under the age of 30

• A child or adult that you support financially

• An adult who financially supports you

• Someone who is temporarily disabled

Jessica is 16 years old and earned $1,100 through her photography side gig. Her parents can claim her as a dependent on their tax return. All of the following statements are true EXCEPT… 

• Jessica is required to file an income tax return

• Jessica is required to pay a 15.3% self-employment tax

• Jessica can file her own tax return even though her parents are claiming her as a dependent

• Jessica should expect to receive a W-2 in January

Your friend Laila is talking to you about the benefits of tax filing websites. Which of the following is true?

• Filing your taxes using a website is always free of charge

• You are guaranteed a higher refund than if you were to use a paper form or hire a professional

• If you owe money to the IRS, you receive a discount if you e-file use a tax filing website

• You can avoid the costs of having to pay a professional, though you may have to pay for e-filing online