Everfi Tax Simulation: Understanding Taxes Version 2 ENHANCED

Scarlett, Evelyn, and Elijah are learning about taxes in school. Their teacher asks them which services their taxes help fund and that they benefit from now. Which of the following should they choose?

• Public schools, emergency services, and roads

• Social Security, investments, and the military

• Roads, Social Security, and education

• Military, stock market access, and internet

Aria is learning about different types of taxes in her social studies class. She wants to know which tax provides income for retirees and people with disabilities. Which tax should Aria learn about?

• Social Security tax

• Federal income tax

• Property tax

• State and local taxes

Samuel is preparing his taxes and wants to understand the difference between a tax deduction and a tax credit. How is a tax deduction different from a tax credit?

• Deductions are direct payments to the IRS; credits are refunds.

• Deductions reduce your taxable income; credits directly lower what you owe.

• Deductions only apply to business expenses; credits only to personal ones.

• Deductions are for high-income earners only; credits are for everyone.

Kai and Maria have both kept all their receipts for the year. How should they choose between the standard deduction and itemizing?

• Choose the standard deduction because it is more precise.

• Pick whichever gives them the larger deduction.

• Use itemized deductions since they have their receipts.

• Check their tax bracket to decide.

Avery is getting ready to file her taxes this year. What documents should she gather before starting the process?

• Spreadsheets showing all your financial accounts

• Details of any stocks or bonds purchased last year

• Proof of income and receipts for possible deductions

• Receipts from every purchase made during the year

James just finished his federal return and is expecting a refund. What are the last two steps before he is done?

• Have the person claiming him as a dependent sign his return.

• Send a copy to his bank and to his guardian.

• He must have made a mistake—redo the whole return.

• File state taxes and choose a refund method.

Anika is considering different types of work. She wants to take on projects for various companies without committing to a single employer long-term. Which option best explains the type of work Anika is interested in?

• Jobs done remotely from any location

• Jobs based on internet data use

• Temporary job placements by an agency

• Short-term, freelance or contract work

Aria is working as a gig worker, while Avery is a full-time employee at a company. How is tax withholding different for Aria compared to Avery?

• Gig workers’ pay does not have taxes withheld.

• Gig workers do not pay federal taxes.

• Full-time workers have lower tax rates.

• Gig workers always pay less in taxes.

David recently started working as a gig worker, driving for a rideshare company. Why does David have to pay taxes every three months?

• Employers set payment schedules for workers.

• Since no taxes are withheld, quarterly payments help avoid a large bill.

• Gig workers don’t receive steady pay, so quarterly is easier.

• To combine taxes with union fees.

Henry recently learned about the Earned Income Tax Credit (EITC) while preparing his taxes. Why might Henry claim the EITC?

• So the government can track wage data.

• To help improve community funding.

• So employers know if they’re paying fairly.

• To lower their taxes if they qualify.