WorksheetsTaxes Test Review
Total questions: 36
Worksheet time: 55mins
A person financially supported by another
Preparer
CFO
Auditor
Dependent
Which best describes the difference between a W-2 and W-4?
A W-2 is completed by an employee to determine tax withholding; a W-4 is a summary of annual earnings and taxes withheld by the employer
The W-2 is received when an employee begins a job; a W-4 is received by January 31st
A W-4 is completed by an employee to determine tax withholding; a W-2 is a summary of annual earnings and taxes withheld by the employer which is used to file taxes.
Dependent or Not a dependent? Anna is a teacher who makes $47,000 annually.
Dependent
Not a Dependent
Dependent or Not a dependent? Zander is 18-years old. He works part-time at Kroger making $7,000 a year; however, his parents pay for majority of his living expenses.
Dependent
Not a Dependent
The current minimum requirement a single person makes which requires them to file taxes is __________.
$12,850
$13,850
$14,850
$15,850
When filing taxes, a person has the option to claim the standard deduction or _________ deductions to decrease the amount of income that is taxed.
deduct
refund
itemize
What action can you take to manage future withholdings from your pay and possibly increase your tax refund?
Complete a new W-2 and submit it to your employer
Complete a new W-4 and send it to the IRS
Complete a new W-4 and send it to your employer
There is nothing you can do about it
To deduct or take out, especially for taxes
Refund
Borrow
Withhold
Reduce
Which of the following is not a filing status?
Head of Household
Married Filing Divorced
Married filing separately
Single
Which of the following is false about ALL dependents?
Must be a U.S. citizen, U.S. national, resident alien, or resident of Canada or Mexico
Must be a citizen of the United States
Must have a social security number (ssn), individual taxpayer identification number (itin), or adoption taxpayer identification number (atin)
Must not file "married filing jointly" unless it is only to claim a refund or taxes paid
Check all that apply. You can claim a dependent child if
You provide at least 50% of support for the child
They are your son, daughter, or stepchild
They are a foster child which lived with you at least 6 months
They are under age 19 on December 31st of the tax year
A form which details all "non-employee" compensation such as payments from stocks and specific jobs such as freelancers or contractors
1040
1099
W-4
W-2
An inspection of a filer's tax return by the IRS
Standard Deduction
Dependent
Audit
The standard IRS form that individuals use to file their taxes. It is due on April 15th.
1040
1099
W-2
W-4
According to law, you should receive your W-2 by...
Feb 1st
April 15th
Jan 31st
March 1st
Why do you have to complete a W-4 form
To determine the amount of social security you need to pay
To determine your standard deduction
To pay the correct amount of payroll taxes
To determine how much your employer should withhold from your paycheck for taxes.
FICA is a payroll tax deducted from pay which consists of....
Federal and State taxes
Social security and medicare taxes
Earned income
Federal, State tax and FICA
Gross Pay =
earned income - taxes
earned income + bonuses+dividends+interest
Hours worked x rate of pay
None of the above
A flat-rate tax is applied at the same rate for all individuals
True
False
How much tax do you pay for the first $11,000 of income you make each year? %_, (a)
What are tax deductions?
Deductions reduce the amount of your income before you calculate the tax you owe. They reduce the amount of income that is subject to tax
Money given by the government to help pay for taxes
A penalty for not paying taxes on time
The total amount of income before taxes are taken out
What is a progressive tax system?
A tax system where the tax rate decreases as the taxable amount increases.
A tax system where the tax rate is determined by the taxpayer's age.
A tax system where the tax rate increases as the taxable amount increases.
A tax system where the tax rate remains the same regardless of the taxable amount.
Explain how a progressive tax system works with an example.
In a progressive tax system, as income increases, the percentage of tax paid also increases. For example, in the United States, the tax rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37% for different income levels.
In a progressive tax system, everyone pays the same percentage of tax regardless of income
In a progressive tax system, the tax rates are fixed and do not change based on income levels
In a progressive tax system, the percentage of tax paid decreases as income increases
What does the standard deduction do?
Increases your tax rate
Increases your taxable income
Reduces your tax rate
Reduces your taxable income
How is the amount of the standard deduction determined?
Based on your filing status
Based on your favorite food
Based on your shoe size
Based on your favorite color
Autumn has a job that pays $15.75 per hour. Her paystub lists her 401k withholding as $32, FICA of $23, FIT of $33, and healthcare payment of $16. What is her net pay if she works 30 hours?
$472.50
$104.00
$368.50
$384.50
Which is true about unearned income and unearned income? (SELECT 2 ANSWERS)
Earned income is how much you make from a job
Earned income is any money you make in interest, dividends, etc
Unearned income is how much you make from a job
Unearned income is any money you make in interest, dividends, etc
What does owing a bunch of money on your taxes imply?
You have saved enough money throughout the year.
You have overpaid your taxes.
You are not withholding enough taxes from your pay.
You have received too many refunds.
Which of the following is a method for filing taxes? SELECT ALL THAT APPLY.
E-filing
Complete your tax return manually and mail it to IRS
Scan your completed tax return and email it to the IRS
A tax preparer can file your taxes for compensation
If you make under a certain amount of money, you are not allowed to file taxes.
True
False
IRS stands for...
Important Revenue Service
Internal Reports System
Internal Revenue Service
International Reserve Service
Becky made $7,500 last year. She received her w2 in the mail. Does she have to file taxes? If she doesn't have to, why might she want to file anyways?
Becky made over the minimum amount so she must file taxes for the previous year.
Becky does not have to file, but may want to because she could be owed a refund.
Becky does not have to file, but may want to in case she owes the IRS money.
Becky has to file taxes. Everyone has to file regardless of their income amount.
The ____ dependents you claim, typically the ____ taxes are taken out.
more, more
less, less
more, less
If your situation changes and you need to adjust your W4, when can you do this?
Whenever you want.
Only after tax day, April 15.
You may not adjust your W4.
Only at the beginning of the year.
Tim and Joan are married and filing jointly. Their gross income is $82,500. How much do they owe in federal taxes?
(a)
