Everfi: Filing Your Taxes Lsn 1 Tax Simulation Understanding Tax

What are some examples of things that your taxes pay for which you can use or benefit from now?

• School, first responders and roads

• Social Security, investments and military

• Military, stocks and internet

• Roads, social security and schools

What type of taxes are used by retired people as income and also for people with disabilities?

• Income tax

• State and local taxes

• Social Security

• Property tax

What is the key difference between a deduction and a credit?

• A deduction is a direct payment to the government; a credit is a tax refund.
• A deduction applies only to business expenses; a credit applies to personal expenses.
• A deduction is only available for high-income earners; a credit is available for everyone.
• A deduction lowers taxable income; a credit reduces tax owed.

Maria has collected her receipts and needs to decide whether to take a standard or itemized deduction. Which answer choice best explains to Maria which type of deduction to claim?

• She should claim the itemized deduction because she has receipts.

• She should claim the standard deduction because it is usually more accurate.

• She should check her tax bracket status to see what works best for her.

• She should claim the deduction with the higher value.

To file your taxes, you need to start by collecting all the necessary documents. Which answer selection is the best describing what is needed?

• A record of your income and receipts for any deductions you want to claim

• Receipts of all purchases that you made in the past year

• Spreadsheets of all banking and investing accounts that you have

• A record of stocks and bonds that you bought in the past year

Marcus has completed his federal return, and he is surprised that he will be getting a big refund. He wants to finish his return as fast as possible so what are two more things he will need to do before being officially done?

• Send a copy to his bank and to anyone claiming him as a dependent.

• Get the person claiming him to be a dependent to sign off on his taxes.

• Refunds are rare so he made a mistake. He should redo his taxes.

• File his state taxes and select how he wants to receive his refund.