WorksheetsCrystal Clear Tax Training Practice Test
Total questions: 166
Worksheet time: 4hrs 9mins
Louis's dad pays a tax to the federal government each year based off the money he earns from his business. What type of tax is Louis' dad paying?
Payroll tax
Sales tax
Property tax
Income tax
Your parents pay $3500 in taxes each year based off of the value of your home. Which type of tax is this?
Payroll tax
Property tax
Sales tax
Income tax
IRS stands for:
Internal Revenge Service
Internal Revenue Service
International Revenue System
Italian Ravioli Sauce
Also known as your take home pay.
Salary
Gross pay
Net pay
Withholdings
These taxes come out of a person's paycheck and is meant to help people once they retire.
401k
Social security tax
Unemployment taxes
Payroll deductions
This tax form is received when you start a new job. It determines how much money gets taken out of each paycheck.
W-4
W-2
1099
1040
This is a form you fill out by April 15th to determine how much you either owe or will be refunded in taxes for the previous year.
W-4
W-2
1099
1040
Income Tax
tax on money earned from a job
Sales Tax
Tax paid on items you buy
Property Tax
Tax paid on property you own
The government collects (a) from the (b) .
Taxes
government collects money from citizens
Income
money earned from working a job
Government Services
things paid for by the government for citizens
A tax on money earned from working a job
Sales Tax
Property Tax
Income Tax
Sales Tax
Tax on money earned from working
Tax paid on property owned
Tax on items you buy
Federal Government is in charge of ____________.
The entire United States
A state
Cities and towns
A tax paid on property you own
Sales Tax
Property Tax
Income Tax
Federal Government is in charge of ____________.
The entire United States
A state
Cities and towns
The W-4 form lets...
the government know how much you paid in taxes last year
your employer know how much to withhold from your paycheck
the 3 major credit bureaus know how many dependents you have
you know how much you paid in taxes last year
What item would you DEFINITELY see on a paystub?
Retirement
Healthcare
Gross Pay
Your occupation/role
By claiming "exempt" on the W-4 form...
You are paying all income taxes upfront at the START of the year.
You are requesting an extension to file your taxes
You will NOT have income taxes withheld from your paycheck.
You are paying all income taxes at the END of the calendar year.
Which of the following things is TRUE about the W-2 form EXCEPT...
You get 1 W-2 form every year, even if you had multiple jobs
It contains information you'll need to fill out a 1040
It lets you know how much you earned last year
It lets you know how much was withheld from your paychecks
What do you need to file your 1040 form?
Your W-2
Your W-4
Your prior year's tax return
Income of $50,000 or more
Which of the following is NOT a way you can file your taxes?
Through a tax professional
Mailing in a paper tax return to the Federal government
Using tax software like TurboTax
Through your employer's HR department
the Federal Government earns most of its money from...
Corporate Tax
Social Security and Retirement
Individual Income Tax
Fort Bend county charges tax each year on the house that Jennifer owns. Which type of tax does she pay?
Property Tax
Sales Tax
Income Tax
Payroll Tax
Money that is taken out of a paycheck that goes to city/state/country and for programs that help people when they retire
Property tax
Income/payroll taxes
sales tax
Jan pays federal taxes every year based off her yearly income. Which type of tax is calculated by the amount of your income?
Payroll Tax
Income Tax
Sales Tax
Property Tax
Jake wants to purchase a video game for $10. Jake hands the cashier a $10 bill plus two $1 bills for tax. What tax is Jake paying?
Payroll Tax
Income Tax
Sales Tax
Property Tax
Taking payments out of your pay before you receive it.
withholding
tax return
taxable income
personal exemption
Which of the following is the single largest federal expenditure?
national defense
Social Security
interest
Medicare
A tax on the sale or production of a domestic good is called a(n)…
Estate Tax
Import Tax
"Sin" Tax
Excise Tax
What is a tax?
Money given to school
Money paid to government
Money earned by working
Ms. Fisher receives a paycheck every month for teaching. Each month she sees that money is taken out and given to the government. What tax is she paying with her paycheck?
Sales
Property
Income
A doctor buys land for his office. At the beginning of each year, he receives a bill stating he owns taxes because he owns the building. What type of tax is the doctor paying?
Sales
Property
Income
The total earnings a person receives before paying for taxes and other deductions.
net income
gross income
sales tax
salary
A plan for using money.
budget
salary
income
taxes
The money you pay for goods and services that you buy or use.
expenses
rent
income
salary
The more allowances you claim on your W-4...
The more money is withheld from your paycheck
The less money is withheld from your paycheck
The # of allowances doesn't impact how much $ is withheld
You claim allowances on a W-2, not the W-4
Which of the following is FALSE about the W-2 form? (hint: choose 2 correct answers)
The W-2 is sent out in April of every year
It lets you know how much you earned last year
It lets you know how much was withheld from your paychecks
You get 1 W-2 form every year, even if you had multiple jobs
You can itemize your deductions and take the standard deduction when completing your tax return.
True
False
If you knowingly underpay your taxes, the IRS can impose all of the following EXCEPT
Collecting taxes
assessing a penalty
bringing charges ending in imprisonment
forcing your children to pay
Adjusted gross income plus dividends, minus any deductions, or other adjustments that are allowable in that tax year
Adjustable gross income
Tax liability
Taxable income
Tax credit
What is the IRS?
The U.S. government agency that oversees the collection of federal taxes.
The U.S. government agency that sets federal tax policy
the U.S. government agency that decides how tax cheats should be punished
the U.S. government agency that determines how high sales taxes will be
Under a progressive income tax, who would pay the largest proportion of her income in taxes?
A schoolteacher
The owner of a small business
A millionaire
A student on financial aid
A person reported on a tax form whom a taxpayer supports financially (that would be you)
spouse
dependent
in-law
child
The form sent to the employee in January that states the previous years earnings.
W-4
W-2
1040
I-9
Who pays taxes
everybody
only those who invest in stocks
only those who watch Saturday morning cartoons
only those who earn $20,000
Who collects taxes?
NHS
ABC
IRS
IRA
Which of the following is not a filing status?
head of household
married filing jointly
unemployed
single
Which tax form is filled out by a new employee?
1040
1099
W2
W4
A person reported on a tax form whom a taxpayer supports financially (that would be you)
spouse
dependent
in-law
child
The date by which you must file your taxes is
March 15, 2019
April 15, 2019
June 1, 2019
December 31, 2019
If you had more than one job, you should...
Add all your W-2s information and put it on one form.
File a different form for each W-2 or Job you had
You do not need to file a return if you are a student
None of these are correct
To claim you as a dependent, parents must provide how much of your support?
100%
50%
More than 50%
$12,000 of support
What does the word withholding mean?
How much money you give to the government
How much money you pay
How much money is taken out of your paycheck
How much money you earn
When do you start paying taxes?
Age 18
Age 21
When you start earning money
When you purchase your first item
Which proves you are eligible to work in the country?
I-6
I-9
1099
1040
3. Which of the following best states the purpose of the IRS?
a. To ensure that everyone complies with the numerous tax laws in the United States.
b. To get as much money out of the American people as possible.
c. To catch as many people cheating on their taxes as possible.
d. To oversee the rules and regulations of Congress and to ensure domestic tranquility.
5. Which of the following correctly identifies the date that a tax return is due each year?
a. January 1st
b. February 14th
c. April 15th
d. December 31st
7. What is an audit?
a. It is when a taxpayer files his/her taxes each year.
b. It is a close examination of a taxpayer’s income earned and expenses throughout the year.
c. It is when a taxpayer owes more taxes because they have not paid enough throughout the year.
d. It is the process the IRS uses to decide whether or not you should pay more taxes the next year.
12. Which of the following is the form received in January that includes the information necessary for an employee to complete a tax return?
a. 1040 Form
b. W-2
c. W-4
d. 1099 Form
13. What are the possible consequences for failing to file a proper tax return?
a. You could have to pay higher taxes for the rest of your life.
b. You could be charged a large fine or could face imprisonment.
c. You could have to conduct community service until your taxes are paid off.
d. The likelihood that the IRS will catch you is slim so you have nothing to worry about.
14. According to the reading, why do we pay taxes?
a. It is fun and everyone enjoys it.
b. It has just always been that way so we continue to do it.
c. It is the best way to show that we love our country.
d. It is part of being a responsible citizen.
Which of the statements below is TRUE about filing your taxes, assuming only income comes from the salary you earn at BigTech Company?
You need to file your tax return by the end of the calendar year ( typically December 31st)
If your employer takes out federal income taxes through payroll withholdings, you do not need to file a tax return
You must file your tax return by April 15th of the following year or request an extension by that date.
You do not need to pay any income taxes until April 15th, so you should ask your company to wait until after that date to withhold any money.
Which of the following describe what a "dependent" is for tax purposes?
Someone under the age of 19 who you financially support
Someone who is temporarily disabled
Someone who financially supports you
Someone who is a full-time student under the age of 30.
Which of the following statements about the W-2 form is TRUE?
A W-2 lists all the money you earned in cash over the last year
The total wages you earned from ALL jobs you worked in the previous year appear on ONE W-@ form
You need a separate W-2 form from each of your employers in order to file your taxes.
The W-2 includes information about the interest you earned from your investments.
Gross income is:
the total amount of money you earn
the amount of money you receive after decuctions are subtracted
the total amount of money you spend
sales taxes on items you buy
Net income is:
the total amount of money you earn
the amount of money you receive after deductions are subtracted from your gross income
the amount of money that is taken away in the form of taxes
the hourly rate of pay
A deduction is
gross income
money added to your income
net income
money taken out of your income
A deduction is
gross income
money added to your income
net income
money taken out of your income
A form that details all "non-employee" compensation, including for specific jobs like freelancers or contractors
1040
1040EZ
1099
W-2
A form that details all "non-employee" compensation, including for specific jobs like freelancers or contractors
1040
1040EZ
1099
W-2
Any income (wages/salary) that is generated by working
Earned Income
Taxable Income
Tips
Dividends
Any income (wages/salary) that is generated by working
Earned Income
Taxable Income
Tips
Dividends
Someone you financially support who can be "claimed" on a tax return to reduce your taxable income and lower your taxes
Dependent
CPA
IRS agent
Best Friend
The set amount of money, per dependent, you can subtract from your taxable income
Exemption
Withholding
Tax Break
Form used by an employer to verify an employee's identity and to establish that the worker is eligible to accept employment in the United States
I-9
1099
W-4
W-2
A federal program that provides monthly benefits to millions of Americans, including retirees, military families, surviving families of deceased workers, and disabled individuals
Social Security
Medicare
Food Stamps
WIC
A form that an employer must send to an employee and the IRS at the end of the year to report the employee's annual wages and taxes withheld from their paycheck
W-2
W-4
1040A
1099
These factors are describing which TAX FORM?
-This form requires that you bring ID first day on the job
-This form requires you prove you are eligible to work in the US (through ID)
w2
w4
i-9
1040ez
These factors are describing which TAX FORM?
-This form requires that you bring ID first day on the job
-This form requires you prove you are eligible to work in the US (through ID)
w2
w4
i-9
1040ez
Which area on the image represents the amount of money that would go into this person's bank account on pay day?
B
G
H
J
Which spot on the paystub represents the amount of money this employee has made / what has been deposited in their account so far this year?
E
G
I
J
WHERE can you file your taxes?
Online
In person at a tax office
In person at a tax booth
ANY of these
What do you need to file your taxes???
All W2's from the year
Your ID
Your social
ALL of the above
This form will be sent to Lily by the end of January. She will use this W-2 form to…
Obtain employment
Receive her paycheck
File her income taxes
Begin her retirement savings
This form will be sent to Lily by the end of January. She will use this W-2 form to…
Obtain employment
Receive her paycheck
File her income taxes
Begin her retirement savings
If Lily is completing her 1040 form, what piece of information will she find on a different document rather than on this W-2?
Gross wages earned
Federal income taxes she’s already paid
State income taxes she’s already paid
Income earned from her investments
All of the following employee information is included on a W-2 form EXCEPT...
Employer name and EIN (Employer Identification Number)
Employee’s Social Security Number
Employee’s date of birth
Employee’s current address
Based on this W-2, which of the following statements is TRUE?
Lily is contributing to a 401(k) retirement through her employer
Lily works in the state of Indiana, which does not have an income tax
Lily’s taxable wages are much larger at the federal level than at the state or local level
Lily earned more than $12,950 (which is the standard deduction amount)
What were Lily’s gross wages for this period?
$1,722.44
$2,480.17
$14,450
$16,172.44
Based on the W-2 form provided, what was the largest withholding?
Medicare tax
Federal income tax
State income tax
Social security tax
As Lily files her taxes, she learns that her federal total tax due ends up being $206. According to her Federal income tax withheld, how much of a tax refund can she expect back?
$206.00
$874.50
$1,080.50
$13,369.50
Based on the W-2 provided, Social Security tax withheld for Lily was __________ of wages and Medicare tax withheld was __________ of wages.
1.3%, 5.5%
6.2%, 1.45%
10%, 10%
28%, 39.8%
What was the total amount deducted from Lily’s pay for Federal, State, and Local income tax?
$1,314.59
$1,547.24
$1,781.33
$2,886.75
Based on the W-2 provided, Lily paid Indiana a state income tax rate of ____.
1.2%
2.9%
3.2%
4.6%
What is Maxwell’s filing status?
Single
Married filing jointly
Head of household
Dependent
Which statement below is TRUE, based on this W-4 form?
Maxwell and his spouse are planning to itemize their deductions this year
Maxwell and his spouse both work or Maxwell himself has two jobs
Maxwell and his spouse both work at Big City Office Furniture
Maxwell and his wife are the owners of Big City Office Furniture
In order to fill out this W-4 form, Maxwell needed to know all of this information EXCEPT…
His Social Security number
His address
The amount of taxes he’s paid in the last five years
The number of dependents he plans to claim on his tax return
Assume that Maxwell and his spouse anticipate earning around $110,000 in combined income this year. Given how he’s completed this W-4 form, how many children under the age of 17 does Maxwell have?
1
2
3
4
Given how he’s completed this W-4 form, how many other dependents does Maxwell have?
1
2
3
0
If Maxwell and his spouse were to have another child, but all other aspects of their life stayed the same, which entries on a new W-4 form would he need to change?
No need to change the form
Step 2
Step 3
Step 4
In June, Maxwell’s father comes to live in their home and can count as Maxwell’s dependent. What steps does Maxwell need to take next?
There are no steps Maxwell needs to take
Submit a new W-4, claiming $500 more in Box 3
Submit a new W-4, claiming $2000 more in Box 3
Verbally tell the HR department at Big City Office Furniture
How much EXTRA money is Maxwell having held from each paycheck?
$0
$10
$50
Cannot tell from this form
A W-4 form is given to you by your employer to complete for that specific job. Which statement below is definitely TRUE?
He started working at this job during the 2019 tax year
He submitted the W-4 a few days after he started
He completed this W-4 for his job at Big City Office Furniture
He lives and works in the same city
When Maxwell completes this W-4, who should he submit it to?
Big City Office Furniture
The IRS
No one - he keeps it for his records
His spouse
This form will be sent to Lily by the end of January. She will use this W-2 form to…
Obtain employment
Receive her paycheck
File her income taxes
Begin her retirement savings
If Lily is completing her 1040 form, what piece of information will she find on a different document rather than on this W-2?
Gross wages earned
Federal income taxes she’s already paid
State income taxes she’s already paid
Income earned from her investments
All of the following employee information is included on a W-2 form EXCEPT...
Employer name and EIN (Employer Identification Number)
Employee’s Social Security Number
Employee’s date of birth
Employee’s current address
Based on this W-2, which of the following statements is TRUE?
Lily is contributing to a 401(k) retirement through her employer
Lily works in the state of Indiana, which does not have an income tax
Lily’s taxable wages are much larger at the federal level than at the state or local level
Lily earned more than $12,950 (which is the standard deduction amount)
What were Lily’s gross wages for this period?
$1,722.44
$2,480.17
$14,450
$16,172.44
Based on the W-2 form provided, what was the largest withholding?
Medicare tax
Federal income tax
State income tax
Social security tax
As Lily files her taxes, she learns that her federal total tax due ends up being $206. According to her Federal income tax withheld, how much of a tax refund can she expect back?
$206.00
$874.50
$1,080.50
$13,369.50
Based on the W-2 provided, Social Security tax withheld for Lily was __________ of wages and Medicare tax withheld was __________ of wages.
1.3%, 5.5%
6.2%, 1.45%
10%, 10%
28%, 39.8%
What was the total amount deducted from Lily’s pay for Federal, State, and Local income tax?
$1,314.59
$1,547.24
$1,781.33
$2,886.75
Based on the W-2 provided, Lily paid Indiana a state income tax rate of ____.
1.2%
2.9%
3.2%
4.6%
What is Maxwell’s filing status?
Single
Married filing jointly
Head of household
Dependent
Which statement below is TRUE, based on this W-4 form?
Maxwell and his spouse are planning to itemize their deductions this year
Maxwell and his spouse both work or Maxwell himself has two jobs
Maxwell and his spouse both work at Big City Office Furniture
Maxwell and his wife are the owners of Big City Office Furniture
In order to fill out this W-4 form, Maxwell needed to know all of this information EXCEPT…
His Social Security number
His address
The amount of taxes he’s paid in the last five years
The number of dependents he plans to claim on his tax return
Assume that Maxwell and his spouse anticipate earning around $110,000 in combined income this year. Given how he’s completed this W-4 form, how many children under the age of 17 does Maxwell have?
1
2
3
4
How much EXTRA money is Maxwell having held from each paycheck?
$0
$10
$50
Cannot tell from this form
A W-4 form is given to you by your employer to complete for that specific job. Which statement below is definitely TRUE?
He started working at this job during the 2019 tax year
He submitted the W-4 a few days after he started
He completed this W-4 for his job at Big City Office Furniture
He lives and works in the same city
When Maxwell completes this W-4, who should he submit it to?
Big City Office Furniture
The IRS
No one - he keeps it for his records
His spouse
