Font size
WorksheetsReducing income taxes owed
Total questions: 19
Worksheet time: 11mins
Tax avoidance is which?
illegal
legal
not at all possible
done by reducing one's taxable income
Tax evasion is which?
legal
illegal
not at all possible
possible when people do not report income they've made
What makes something a "qualified" retirement account?
It has qualified managers
It qualifies for tax deferment or forgiveness
It follows the voluntary withdraws at age 59 1/2 and mandatory at 70 1/2
It qualifiies people to retire at age 62.
If a single taxpayer earns $35,000 and contributes $3,000 to their 401 (K), their taxes are based on what? (No other factors considered.)
The full amount of earnings ($35,000)
The amount of earnings minus the funds to 401(k) ($32,000)
The I-9 Form is what?
Used to "file" one's income tax.
An initial form to verify your citizenship and social security #
A form used by illegal-alien's to work in the U.S.
A form the employer produces by Jan 31st so you can file.
You go to the tax table and find on your level of income you owe $3,800 of taxes. You look at your W-2 and see that you already paid (thru employer) $3,600. This means what?
You are entitled to a refund of the 3,600.
You are entitled to a refund of $200.
You owe $3,600.
You owe $200.
Trisha filled out and signed her federal withholding form with Single 0 allowances. Riana completed it with Single 1 allowance. This means what?
Riana will have the maximum tax taken out of her paychecks.
Riana will have more tax taken from her.
Trisha will have less tax taken out of her paychecks.
Trisha will have the maximum tax taken out of her paychecks.
Complete the sentence: The ______ is for the filing status and allowance(s) for federal government while the ____________ is for New York State.
W-2 and IT-2104
W-4 and IT-2104
IT-2104 and W-2
IT-2104 and W-4
Filing income taxes is what?
always necessary
determining underpayment or overpayment
done by January 31st
writing your money in and out on paper & creating a file.
FSA stands for which?
Future Savings Account
Flexible Savings Account
Flexible Spending Account
Future Spending Account
HSA stands for which?
Health Spending Account
Health Savings Account
Healthcare Supplies Account
Healing Supplies Act
Ways to reduce one's taxable income, legally are?
contribute to an FSA or HSA
contribute to a 401(k)
contribute to a 403 (b)
All of the above
Whether people prepare a federal return on paper or electronically, the form they are preparing is what?
W-2
1040
I-9
W-4
Marissa's standard deduction is $12,200. She adds up all of her expenses (medical expenses not covered by insurance, interest on her mortgage, property taxes, contributions to charity). It is $13,000. She should do what?
Take the itemized tax deduction of $13,000.
Take the standard tax deduction of $12,200
Take either one as it won't affect her ending amount of tax.
If one has a year with extra income they did not plan for (capital gains on investment or house, lottery, etc.), they may want to lower tax by depositing to a what?
Roth IRA
Traditional IRA
Either, they both allow you to take a deduction.
Neither allows you to take a deduction.
The money in one's Flexible Spending Account is rolled over from year to year if you don't use it.
True
False
An HSA operates by "Use it or lose it".
True
False
When you are young, you have more time for your investment to compound. If you don't want to pay tax on all those earnings in the future, contribute to which?
Traditional IRA
Roth IRA
A 1099-INT statement is sent? (Choose Two)
By your mutual fund advisor.
By your bank if you earned over $10 interest on bank account.
Does not need to be claimed as income.
Needs to be claimed as income.
