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WorksheetsECON 1503 Ch 3
Total questions: 23
Worksheet time: 12mins
If Diane was in a 25% tax bracket and received a $2,700 tax credit, by how much would her taxes be reduced?
Hint: a tax credit reduces amount owed dollar-for-dollar.
67.50
135
675
2700
Individuals are allowed to give money or items of any value to a person without being subject to estate taxes.
True-Individuals are allowed to give money or items of any value.
False-Individuals are allowed to give money or items valued at $14,000 or less in a year to a person without being subject to estate taxes.
Amounts given for tuition payments or medical expenses are not subject to gift taxes.
True
False
Cash and prizes won on television game shows are subject to both federal and state taxes.
True
False
The IRS has made online filing free through the:
TurboTax
Free File Alliance.
A worker's primary goal should be to
Pay his or her taxes using estimates for income and deductions.
Pay no income taxes.
Pay the average tax rate for people working in his or her industry.
Pay his or her fair share of taxes while taking advantage of appropriate tax benefits.
Pay no taxes of any type.
A tax due on the purchase of gasoline is called a(n)
Estate tax.
Excise tax.
Income tax.
Real estate property tax.
A tax imposed on the value of a person's property at the time of death is called a(n)
Estate tax.
Excise tax.
Income tax.
Real estate property tax.
This tax is a major financial planning factor for most people because it is sometimes imposed at the federal, state, and local levels.
Estate tax
Excise tax
Income tax
Real estate property tax
The tax that is a major source of revenue for local governments is called a(n)
Real estate property tax.
Estate tax.
Income tax.
Gift tax.
Taxes on earnings that fund old age, survivor, and disability insurance benefits are called
Estate taxes.
Excise taxes.
Social Security taxes.
Real estate property taxes.
The amount levied on the value of property bequeathed by a deceased person is
Inheritance tax.
Excise tax.
Social Security tax.
Real estate property tax.
So, the estate tax is a tax on the total amount of the estate, after creditors are paid but before any heirs get their bequest. The tax is paid by the estate itself. Inheritance tax occurs after the heirs have received their payouts from rich Uncle Thaddeus. It is a tax on the amount received and is paid by the heir.
True
False
Income that is not subject to tax is called
Adjusted gross income.
Earned income.
Tax-deferred income.
Tax-exempt income.
Gross income less Adjustments to Income equals
Adjusted gross income.
Earned income.
Exclusions from income.
Tax-deferred income.
The tax based on the total tax due divided by taxable income is called the
AMT.
Average tax rate.
Income tax rate.
Marginal tax rate.
The rate used to calculate the tax due on the next dollar of income is referred to as the
Average tax rate.
Income tax rate.
Marginal tax rate.
Total tax rate.
At the end of the year, employees receive a ____ form that reports annual earnings and the amounts deducted for taxes from their employers.
1040
1099
W-2
W-4
At the end of the year, Yvonne received a form from her bank that reported income from her savings. That form is called a
1040.
1099
W-2.
W-4.
At the end of the year, Walter received a form that showed his payments from independent contracting. That form is called a
1040.
1040.
1099
W-2.
W-4.
Nancy is married to Jerry and needs to complete her tax form. They both earn about the same amount of money each year. What filing status would be best for them?
Single
Married, filing a joint return
Head of household
Qualifying widow or widower
Bob was married to Sandy, and they have a 12-year-old son. Sandy passed away last year. Bob needs to complete his federal income taxes for the year. What filing status could he use for 2 years after the death of his spouse?
Single
Married, filing a joint return
Qualifying widow or widower
Individuals can file their federal taxes using all of the following except
Use tax preparation software to file online.
Use tax preparation software to print and mail.
Electronic filing using Free File Alliance.
Deliver in person.
