WorksheetsUnit 6 Taxes & Insurance Test
Total questions: 22
Worksheet time: 19mins
What is a tax deduction?
This reduces your taxable income
A direct reduction of the tax owed
A fixed amount everyone is entitled to deduct
A penalty for not paying enough taxes throughout the year
Which tax form is typically used by individuals to file their annual income tax returns?
Form 1040
Form W-2
Form 1099
Form W-4
How does a deductible work in an insurance policy?
It is the amount you pay before your insurance policy begins to pay
It is the maximum amount the insurance company will pay
It is a discount given at the time of purchasing a policy
It is the amount refunded after a claim is processed
What is a tax credit?
A direct reduction in the amount of taxes owed to the IRS
A reduction in taxable income
A fixed amount everyone gets regardless of their income
A penalty for underpayment of taxes
Liability insurance in a car insurance policy covers:
Damage to your own vehicle
Injuries to yourself
Damage or injuries you cause to others
Theft of personal items from your car
What form do employers provide to their employees, showing the total income earned and taxes withheld for the year?
Form 1040
Form W-2
Form 1099
Claim
I determine how much money is withheld from your paycheck for income taxes. Who am I?
W-2 form
I-9 form
W-4 form
1040 form
When are you required to file your taxes?
When you turn 18
When you make more than the minimum income requirement for a single-filer
When you get a full-time job (part-time dose not count)
When you are notified by the IRS that you are required to pay federal income taxes
When you complete your 1040 form, if you overpaid your taxes and the government owes you money, that is called a _____.
withholding
direct deposit
deduction
refund
A formal request to an insurance company asking for a payment when the policyholder has an accident, illness, or injury
premium
coverage limit
Deductible
This is the minimum car insurance required by law
Liability
Collision
Comprehensive
Full Coverage
What role does insurance play in financial planning?
It guarantees that income and assets are protected
It helps build and maintain one's credit score
It helps cover day-to-day expenses
It grows in value and appreciates over time
Each of these factors impacts your car insurance premium EXCEPT...
Deductible amount
The vehicle you are insuring
How old you are
Your income
Which insurance coverage is required by law?
Homeowners insurance
Auto insurance
Renters insurance
Disability insurance
Someone who relies on someone else for income and care for tax purposes. May make you eligible for a tax credit.
What type of taxation system imposes a higher tax rate as the income of the taxpayer increases?
Proportional tax
Regressive tax
Progressive tax
Flat tax
What is the agency responsible for collecting taxes at the federal level?
Security and Exchange Commission (SEC).
Internal Revenue Service (IRS).
Federal Reserve System (FED).
Consumer Financial Protection Bureau (CFPB).
What is a premium?
The amount you pay the insurance company for coverage.
The amount you are personally required to pay before your insurance covers the cost.
A fixed fee you pay for specific medical services.
The most you have to pay for health care in a full year.
If you have a higher premium it will usually mean a ________ deductible.
Higher
Lower
You’ve submitted your first claim with your insurance company for $2,000. They pay $1,500. Why?
You have a $500 premium to pay first
You have a $500 deductible to pay first
You have a limit of $1,500 on claims
You have a $500 new claim clause
Which is true about risk and insurance?
The higher the risk, the higher your insurance deductible
The higher the risk, the lower your insurance deductible
The higher the risk, the higher your insurance premium
The lower the risk, the higher your insurance deductible
