WorksheetsTEST Taxes
Total questions: 25
Worksheet time: 13mins
Name
Class
Date
1.
Grace has decided to e-file her taxes this year. Why should she file her state and Federal taxes together through the same software?
a)
Both tax returns are actually reviewed by the Federal government, so filing them together expedites the process.
b)
If she files them together, she's more likely to receive a larger refund or get a tax credit.
c)
A majority of e-filing software companies provide a significant discount if you file both returns together.
d)
Grace will have just one submission ID, which makes it less likely that the state will reject her state tax return.
2.
Why should you accurately complete a W-4 form any time you start a new job or change your tax status?
a)
You need a copy of your W-4 to file your tax return annually
b)
Your W-4 determines how much Federal income tax money your employer should withhold
c)
Your W-4 determines your total tax bill at the end of the year
d)
Completing a W-4 will guarantee you receive a large tax refund
3.
Jay filed his taxes and found out he owes money. What is the most reasonable explanation as to why he owes money in taxes?
a)
Not enough money was withheld from his paychecks.
b)
Too much money was withheld from his paychecks.
c)
When filing his taxes, Jay accidentally checked “Married filing jointly” instead of “Single”.
d)
The IRS is asking Jay for a future advance on his possible taxes for next year.
4.
The Federal government spends the most amount of tax money on...
a)
Science
b)
Veterans
c)
Education
d)
Health
5.
Which of the following people might want to claim EXEMPT on their W-4 form?
a)
John, who is 20 and expects to earn $13,300 from his internship.
b)
Stacey, who is 16 and expects to earn $7,500 from her part-time job.
c)
David, who is 23 and expects to earn $15,000 from his part-time job.
d)
Hannah, who is 25 and expects to earn $55,000 from her full-time job.
6.
Which of the following statements is TRUE about the cost of living and state and local taxes?
a)
The cost of living and how much you pay in state and local taxes are not directly related, but they can impact how much extra money you have from each paycheck.
b)
States with HIGHER costs of living have HIGHER state and local taxes.
c)
States with HIGHER costs of living have LOWER state and local taxes.
d)
The state and local governments use the cost of living to determine what the tax rates should be.
7.
All of the following are factors that impact the amount someone may pay in taxes EXCEPT...
a)
Income
b)
Political party
c)
State
d)
Marital status
8.
Tamara found out that she owes $3,200 in taxes. She cannot afford to pay the entire amount right now, so she is going to arrange an installment plan with the IRS. What is the one thing that Tamara should be prepared for?
a)
She'll have to redo her tax return so that she can note she'll be using an installment plan.
b)
She will pay more than $3,200 because she will be paying additional money in interest with each payment.
c)
Her credit score may decrease because of her inability to pay back the total she owes to the IRS.
d)
She will have to meet an earlier tax filing deadline next year in case she owes money again.
9.
Which of the following is the largest source of income for the Federal government?
a)
Payroll tax
b)
Income tax
c)
Corporate tax
d)
Property tax
10.
Which person should expect to receive a W-2 form from their employer by January 31st, 2021?
a)
Marcy, who has sold handcrafted vases online for the past 5 years
b)
Jose, whose first job started on January 10, 2021
c)
Arnie, who did an unpaid internship in summer 2020 for a local newspaper
d)
Kelly, who has worked for the same department store for the last 15 years
11.
Which of the statements about the current U.S. tax system is TRUE?
a)
Our current system is described as being a progressive system because it imposes higher rates on those who earn more.
b)
Your friend tells you his marginal tax rate is 22%. That means that he pays 22% on all of his income.
c)
Everyone in the US who makes more than the minimum income requirement pays one flat tax rate.
d)
Our current system is described as being a regressive system because it imposes higher rates on those who earn less.
12.
Jeremy just started a new job and completed his W-4 form. Who should he submit it to?
a)
His employer
b)
His spouse
c)
The IRS
d)
No one - he keeps it for his records
13.
What penalty might you face if you fail to file a tax return?
a)
You are charged 10% of the amount you owe every month.
b)
You could go to jail for up to 6 months.
c)
You are charged 5% of the amount you owe every month.
d)
You are charged an additional processing fee for the tax returns you file in the next 5 years.
14.
All of the following information should appear on your W-2 form EXCEPT...
a)
Your name, address, and employer information
b)
Your interest earned on savings and investments
c)
Your wages, tips, and compensation from that particular employer
d)
The amount you paid during the last year for Medicare and Social Security
15.
Which of the following statements about marginal and effective tax rates is TRUE?
a)
Marginal rate is the average tax rate on your entire income, while effective rate is based on your total income and determines what tax bracket you are in.
b)
Marginal rate is based on your total income and determines what tax bracket you are in, while effective rate is the average tax rate on your entire income.
c)
Marginal rate is the total amount of money you paid in taxes last year, while effective rate is the refund amount you received last year.
d)
Marginal rate and effective rate can be used interchangeably, as they mean the same thing.
16.
Who is legally required to file a tax return? (Note: All of the following people can be claimed as a dependent.)
a)
Madison, who earned $350 from her cake business.
b)
Matthew, who received $800 in investment income.
c)
Greg, who earned $1,250 from his part-time job.
d)
Risha, who earned $14,600 from her internship.
17.
Samantha was able to lower her overall tax burden by directly reducing the amount of money she owes to the IRS. Which of the following most likely explains what happened?
a)
She received tax CREDITS.
b)
She claimed EXEMPT on her W-4 form.
c)
She received a tax DEDUCTION.
d)
She is considered a household employee, and is therefore exempt from self-employment taxes.
18.
When people refer to "Tax Day" they mean...
a)
January 1, the first day of the calendar year
b)
April 15, the typical deadline to file your taxes
c)
December 31, the last day to earn income and have it count toward that tax year
d)
Whatever day your tax refund comes in the mail
19.
Which statement about filing a tax return is FALSE?
a)
Paper filing your tax return is free, but it takes a lot longer to process and get back a refund if you are owed one.
b)
Filing with a tax professional is the best option for those people whose tax situation has remained the same and is relatively simple.
c)
People who are unfamiliar with filing taxes can still use e-filing software, because there is usually access to support if they need it.
d)
Filing with a tax professional is often the method that is most susceptible to scams.
20.
A dependent is someone who...
a)
relies on someone else to provide a quarter or less of their financial support.
b)
relies on someone else to provide more than half of their financial support.
c)
is able to fully financially support themself.
d)
provides financial support for someone else.
21.
When you sit down to file your 1040 form, which document(s) should you have in front of you?
a)
W-2 form(s)
b)
W-4 form(s)
c)
I-9 form(s)
d)
Checking account statements from last year
22.
All of the following are ways to pay any taxes you owe EXCEPT...
a)
Using your debit or credit card to make an online payment
b)
Sending a check
c)
Make a payment directly from your bank account
d)
Use an app or website like PayPal or Venmo
23.
Which of the following high schoolers would be considered a self-employed contractor?
a)
Kelly, who makes homemade jewelry in her spare time and sells them through her online store.
b)
Amy, who babysits during the week and weekends.
c)
Shrini, who mows lawns for his neighbors after school.
d)
Joel, who delivers his neighborhood's newspapers on weekday mornings.
24.
What form do you use to file a tax return with the IRS?
a)
W-2
b)
W-4
c)
1040
d)
I-9
25.
Which is a type of EARNED income?
a)
Social Security Benefits
b)
Retirement Account Distributions
c)
Money Received from Bonuses
d)
Unemployment Compensation
100 %
