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Chapter 7 - Taxes & Government Spending

Total questions: 61

Worksheet time: 33mins

Name
Class
Date
1.

Which is TRUE if you do not pay your taxes?

a)

You owe twice as much the following year

b)

You're more likely to be approved for low interest loans

c)

You cannot go to jail (but you will be heavily fined)

d)

Your credit score may be impacted

2.

Our tax money is spent on all of the following EXCEPT:

a)

Social Security

b)

The Military

c)

Private School Education

d)

National Parks

3.

The W-4 form lets...

a)

the government know how much you paid in taxes last year

b)

your employer know how much to withhold from your paycheck

c)

the 3 major credit bureaus know how many dependents you have

d)

you know how much you paid in taxes last year

4.

True or False: All wages, tips, and bonuses are taxable unless specifically excluded.

a)

True

b)

False

5.

Jason is 15 and earned $1450 at his job last summer. Should he file a tax return?

a)

No, because he didn't earn enough.

b)

No, because you have to be 16 and older to file taxes.

c)

Yes, because he may get a refund.

d)

Yes. You must file taxes even if you didn't earn enough.

6.

Which of the following is NOT a way you can file your taxes?

a)

Through a tax professional

b)

Mailing in a paper tax return to the Federal government

c)

Using tax software like TurboTax

d)

Through your employer's HR department

7.

True or False: A teen's earned income can be reported on a parent's tax return.

a)

True

b)

False

8.

If a teen files a tax return, can the parent still claim him/her as a dependent?

a)

Yes. All teens are dependents until they are 18 years old

b)

No. If a teen files a tax return, he/she cannot be claimed

c)

Yes, as long as the teen meets the dependency requirements

d)

Yes, but the parent has to add the teen's income to theirs

9.

Luisa earned $1,200 at her part-time job, and $500 from babysitting in cash. Which is TRUE?

a)

She will report her total income as $1,700.

b)

She will report her total income as $1,200.

c)

She will report her total income as $500.

d)

Luisa is required to file a tax return.

10.

Who primarily uses our tax money? (hint: choose 2 correct answers)

a)

Your employer

b)

The state government

c)

The Federal government

d)

Local Businesses

11.

What types of taxes contribute to Federal tax revenue? ( hint: choose 4 correct answers :)

a)

Corporate Income Tax

b)

Income Tax

c)

Estate Tax

d)

Excise Tax

12.

Which of the following is FALSE about the W-2 form? (hint: choose 2 correct answers)

a)

The W-2 is sent out in April of every year

b)

It lets you know how much you earned last year

c)

It lets you know how much was withheld from your paychecks

d)

You get 1 W-2 form every year, even if you had multiple jobs

13.

What do you need to file your 1040 form? (hint: choose 2 correct answers)

a)

Your W-2

b)

Your W-4

c)

Your prior year's tax return

d)

Social Security Number

14.

Which is TRUE about earned income and unearned income? (hint: choose 2 correct answers)

a)

Earned is how much you make from a job

b)

Earned is any money you make in interest, dividends, etc.

c)

Unearned is any money you make in interest, dividends, etc

d)

Unearned is how much you make from a job

15.

Jason filed his tax return and owes money. If he doesn't want to pay a fee, when should he pay this amount by?

a)

April 15th

b)

October 15th

c)

December 31st

d)

January 1st of the next year

16.

Taxes are collected by

a)

Businesses

b)

Parents

c)

Foreign countries

d)

Government

17.

IRS stands for

a)

Internal Revenge Service

b)

International Revenue System

c)

Internal Revenue Service

d)

Inspection Ravioli Sauce

18.

Federal Contribution Insurance Act (FICA) are withheld from your paycheck and sent to the government. These are used for (Two answers are to be selected)

a)

Social Security

b)

State

c)

Medicare

d)

Sale

19.

When you receive a new job, you are mandated to file a

a)

Complaint

b)

Divorce

c)

W-4

d)

W-2

20.

When you are ready to file for taxes you must have form

a)

W-2

b)

W-6

c)

WD40

d)

W-2484

21.

The easy way to file for taxes is using form

a)

1800

b)

1745

c)

1999EZ

d)

1040EZ

22.

The two common filing status are

a)

Single

b)

Married

c)

Both A and B

d)

Neither A or B

23.

A fixed amount all people are allowed to deduct from their adjusted gross income to reduce their tax liability

a)

Standard Deduction

b)

Itemized Deduction

24.

A specific expenses that, under tax law, can be deducted from income to reduce the amount of income subject to income tax

a)

Standard Deduction

b)

Itemized Deduction

25.

Who pays taxes

a)

You

b)

Adults

c)

Immigrants

d)

Everyone

26.
a tax in which the tax rate increases as the taxable amount increases
a)
progressive
b)
regressive
c)
flat
d)
proportional
27.
a tax system with a constant marginal rate, usually applied to individual or corporate income. 
a)
regressive
b)
progressive
c)
income
d)
flat
28.
A popular suggestion is to eliminate the income tax and replace it with a national sales tax, called the fair _____. The idea is that everyone pays their fair share based on what they spend rather than what they earn.
a)
play rule
b)
tax
c)
implementation 
d)
lady
29.
A _____________tax may at first appear to be a fair way of taxing citizens because everyone, regardless of income level, pays the same dollar amount. By taking a closer look, it is easy to see that such a tax causes lower-income people to pay a larger share of their income than wealthier people pay
a)
progressive
b)
income
c)
flat
d)
regressive
30.
A _________ tax, also referred to as a flat tax, impacts low-, middle- and high-income earners relatively equally. 
a)
regressive
b)
proportional
c)
income
31.
A _______tax system, or a ______ tax system, assesses the same tax rate to taxpayers regardless of income or wealth. It is meant to create equality between marginal tax rate and average tax rate paid. Under a proportional tax system, individual taxpayers pay a set percentage of their income regardless of total income earned.
a)
progressive, flat
b)
proportional, flat
c)
regressive, proportional 
32.
Under a ________ tax system, individuals and entities with low incomes pay a higher amount of that income in taxes compared to high-income earners. 
a)
Regressive
b)
Progressive
c)
Proportional
d)
Flat
33.
Jennifer earns $400 per week and pays 10% tax on groceries costing $200 would pay $20, or 5% of their income, in taxes. In the same scenario, Janice, earning $800 per week would only spend 2.5% in taxes. Who pays more?
a)
Jennifer
b)
Janice
c)
Mrs. Marsh
d)
Yoda
34.
Federal Income tax is a _______tax
a)
proportional
b)
flat
c)
regressive
d)
progressive
35.
Sales tax is a ______ tax
a)
regressive
b)
progressive
36.
Helps provide retirement income for the elderly and pays disability benefits
a)
medicare
b)
social security
c)
state income tax
d)
federal income tax
37.
A health care program for the elderly and disabled
a)
social security
b)
medicare
c)
state income tax
d)
federal income tax
38.
Also known as take home pay, this is the amount left after all payroll deductions have been taken from the gross income
a)
gross pay
b)
withholdings
c)
net pay
d)
real pay
39.
This is a tax on property inherited after a person's death.
a)
excise
b)
proportional
c)
gift
d)
estate
40.
This is the top source of revenue for the federal government.
a)
individual income taxes
b)
corporate income taxes
c)
customs duties
d)
FICA
41.
This is a tax on an imported good.
a)
customs duty
b)
gift tax
c)
estate tax
d)
user fee
42.
Under this principle of taxation, a person that benefits from the use of a good or service should pay for it.
a)
ability to pay principle
b)
benefit principle
c)
progressive principle
d)
regressive principle
43.
Which of the following collects your individual income taxes?
a)
Census Bureau
b)
Office of Management and Budget
c)
Internal Revenue Service
d)
Social Security Administration
44.
The federal income tax on individuals was established by the
a)
15th Amendment
b)
Federal Insurance Contributions Act
c)
16th Amendment
d)
Income Tax Act of 1956
45.
Which of the following is not one of the major impacts of government spending?
a)
change in resource allocation
b)
change in income distribution
c)
a reduction of federal debt
d)
government competition with the private sector
46.
On which of the following does the federal government spend the largest portion of its budget?
a)
Medicare
b)
Defense
c)
Social Security
d)
Education
47.
What is spending that is greater than revenue?
a)
balanced
b)
suplus
c)
deficit
48.
What is spending that equals revenue?
a)
balanced
b)
surplus
c)
deficit
49.
Which of the following is closest to the amount of our federal debt?
a)
$19 million
b)
$19 billion
c)
$19 trillion
50.
This is a tax on a very specific item, such as gasoline or tires.
a)
progressive
b)
excise
c)
sin
d)
estate
51.
The taxing and spending policies of the president and Congress are known as
a)
revenue policy
b)
fiscal policy
c)
monetary policy
d)
recession policy
52.

What is the major component of government spending?

a)

Income Tax

b)

Transfer Payment

c)

Government borrowing

d)

fiscal deficit

53.

------- is a one-way payment to a person or organization which has given or exchanged no goods or services for it

(a)  

54.

Where does government get money for the economy? (select all which may apply)

a)

other countries

b)

citizen taxes

c)

the president

d)

new legislation

e)

business taxes

55.

1. Which is MOST LIKELY a responsibility of a local government in South Carolina?

a)

collecting taxes

b)

patrolling state highways

c)

maintaining the constitution

d)

overseeing Georgia’s food supply

56.

2. South Carolina's sales tax is 6%. However, some places in South Carolina charge a higher rate of sales tax. This is MOST LIKELY because

a)

the sales tax rate is determined by how much money a buyer makes per year.

b)

shipping goods to some cities/counties can be extremely expensive.

c)

cities/counties can add a certain percentage to sales tax for their own needs.

d)

sellers can charge whatever they want as long as the minimum state rate is collected.

57.

3. Which item is the BEST example of a public good or service?

a)

education

b)

movie theaters

c)

television

d)

shopping malls

58.

4. Local governments generally receive their highest amounts of revenue from

a)

federal government

b)

property taxes.

c)

driver’s license fees.

d)

excise taxes.

59.

6. Property taxes, fees, and lottery funds are all

a)

forms of state revenue.

b)

Involuntary contributions.

c)

voluntary contributions.

d)

forms of national revenue.

60.

7. The general sales tax is placed on customer purchases of most items bought at retail stores. The sales tax is a percentage of the price of an item. The state revenue department collects all of the sales tax revenue and returns the local portion to the appropriate counties, cities, and school systems. Based on this information, what would happen if the sales tax were cut?

a)

Businesses would become less profitable.

b)

The state would lose a majority of its funding.

c)

Property taxes would also be cut.

d)

Funding for schools would be reduced.

61.

8. The state of South Carolina provides services like education, road maintenance, and environmental protection to all of its citizens. Where does the majority of the revenue for such services come from?

a)

private businesses

b)

the federal government

c)

the state treasury

d)

taxes paid by the citizens