Chapter 3 Test

What is the due date for filing federal income taxes in the U.S.?

• March 15

• April 15

• May 15

• June 15

What type of tax is taken out of your paycheck to fund Social Security and Medicare?

• Sales tax

• Capital gains tax

• Payroll tax

• Property tax

Which form is issued by employers to show how much an employee earned and how much tax was withheld?

• 1040

• W2

• W4

• 4868

What is a tax refund?

• A) A bill for extra taxes

• B) Money returned to you when you've overpaid taxes

• C) Penalty for not filing on time

• D) None of the above

What is the purpose of tax withholding?

• To save money for retirement

• To prepay your taxes throughout the year

• To avoid filing a tax return

• To reduce your income

Which of the following reduces your taxable income?

• Tax credits

• Audits

• Deductions

• Penalties

What is the easiest way to file taxes for most people?

• Using tax software or E-Filing

• Filing on paper

• Using a tax professional

• Not filing at all

What is the primary purpose of taxes?

• To make people save money

• To fund government services and programs

• To reward wealthy individuals

• To pay off personal debt

Which filing status generally results in the lowest tax rate?

• Single

• Married Filing Jointly

• Head of Household

• Married Filing Separately

Which of the following is a federal tax form used for income tax returns?

• 1040

• 1099

• W4

• 4868