Understanding Federal Income Tax Basics

What is the first step in filing a federal income tax return?

• Calculate deductions

• Calculate your income

• File for an extension

• Submit the tax return

Tags

DOK Level 2: Skill/Concept

Which of the following is considered part of your gross income?

• Only your salary from your primary job

• Salary from your primary job and any investment income

• Only investment income

• Only alimony received

Tags

DOK Level 2: Skill/Concept

If a person has two jobs, how should they calculate their gross income?

• Add the income from both jobs

• Only consider the income from the higher-paying job

• Only consider the income from the lower-paying job

• Subtract the income from the second job from the first job

Tags

DOK Level 2: Skill/Concept

Which of the following is NOT typically included in gross income?

• Salary from a job

• Investment income

• Gifts received

• Alimony received

Tags

DOK Level 2: Skill/Concept

Why might calculating gross income be more involved for some individuals?

• They have only one source of income

• They have multiple sources of income

• They do not have any income

• They are exempt from taxes

Tags

DOK Level 2: Skill/Concept

Which of the following is a source of income that should be included in gross income?

• Lottery winnings

• Personal loans

• Gifts from family

• Inheritance

Tags

DOK Level 2: Skill/Concept

What is the term used to describe the total income before any deductions or taxes are applied?

• Net income

• Gross income

• Adjusted income

• Taxable income

Tags

DOK Level 2: Skill/Concept

If someone receives unemployment compensation, how should it be treated for tax purposes?

• It should be ignored

• It should be included in gross income

• It should be deducted from gross income

• It should be taxed separately

Tags

DOK Level 2: Skill/Concept

Which of the following is a correct statement about gross income?

• Gross income is the same as net income

• Gross income includes all sources of income

• Gross income is only from employment

• Gross income excludes investment income

Tags

DOK Level 2: Skill/Concept

How should alimony received be treated when calculating gross income?

• It should be excluded

• It should be included

• It should be doubled

• It should be halved

Tags

DOK Level 2: Skill/Concept