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Income and Taxes

Total questions: 20

Worksheet time: 13mins

Name
Class
Date
1.

The Fair Labor Standards Act_______.

a)

is used by the government to set the minimum wage.

b)

requires all states to have the same minimum wage.

c)

sets a limit as to how much one person can earn per year.

d)

None of these answers are correct.

2.

Money added to an employee's base pay is a ________.

a)

tip

b)

commission

c)

bonus

d)

wage

3.

A federal expense item that can be adjusted according to needs and revenues is a(n)

a)

direct tax

b)

indirect tax

c)

mandatory expenditure

d)

discretionary expenditure

4.

Governments may use taxes to ______.

a)

fight inflation

b)

slow a recession

c)

promote economic stability

d)

all answers are correct

5.

A tax, levied by federal and state governments on the sale and transfer of items like air travel, telephone services, and gasoline, is referred to as a(n) _______.

a)

wealth tax

b)

property tax

c)

excise tax

d)

sales tax

6.

A newly hired employee will be asked to complete a ________.

a)

W4

b)

W2

c)

1040

d)

1040 EZ

7.

A noncash compensation received in addition to a wage or salary is a(n) ______.

a)

employee benefit

b)

exemption

c)

bonus

d)

net pay

8.

_____ refers to the amount of time an employee spends at work compared to the amount of time spent in personal life.

a)

Mandatory expenditure

b)

Voluntary compliance

c)

Overtime wage

d)

Work-life balance

9.

The largest government entitlement program currently is _____.

a)

Social Security

b)

Medicare

c)

education

d)

deficit spending

10.

The total income before payroll deductions is called_____.

a)

net pay

b)

adjusted gross income

c)

gross pay

d)

earned pay

11.

(a)   is calculated by subtracting tax adjustments from total income.

12.

An individual who relies on someone else for financial support is a(n) (a)   .

13.

A(n) (a)   tax is paid to the government by the taxpayer.

14.

A(n) (a)   is an amount that a taxpayer can claim for each person who is dependent on that person's income.

15.

Taxes paid by both the employer and the employee that are used to finance the federal Social Security and Medicare programs are called (a)   .

16.

A(n) (a)   is a subtraction from gross pay.

17.

(a)   is gross pay minus payroll deductions.

18.

A federal program that pays for certain health-care expenses for older citizens and others with disabilities is (a)   .

19.

A(n) (a)   is the review of financial records and statements to make sure the information is accurate as reported.

20.

The (a)   is a Wage and Tax Statement that shows a person's earning and the amount of taxes withheld from the earned income during the current year.