MM Chapter 3.2

What is a tax return?

• A form used to report income and taxes to the government

• A document that lists all your expenses

• A receipt for a purchase

• A form for applying for a loan

What is a tax credit?

• An amount that reduces the tax owed

• An amount added to the tax owed

• A penalty for late payment

• A bonus for early filing

What is the purpose of reporting deductions and credits on a tax return?

• To increase taxable income

• To reduce taxable income

• To calculate state taxes

• To determine eligibility for loans

What type of income is typically not included in a tax return?

• Salary

• Interest income

• Dividend income

• Gift income

The IRS is responsible for enforcing laws related to which type of tax?

• Federal income tax

• State income tax

• Local sales tax

• International trade tax

Which of the following can the IRS not simply take from you?

• Your passport

• Your bank account

• Your driver's license

• Your social security number

What does IRS stand for?

• International Revenue Service

• Internal Revenue Service

• Income Revenue Service

• Independent Revenue Service

What does the IRS stand for?

• Internal Revenue Service

• International Revenue Service

• Income Revenue Service

• Internal Return Service

What can the IRS do if fraud is proven?

• Go back as many years as it likes to review returns

• Only review the current year's return

• Review returns for the past two years

• Review returns for the past five years

Which of the following is a source of income that requires voluntary reporting?

• Dividends

• Tips

• Salary

• Interest