WorksheetsIncome Taxes
Total questions: 12
Worksheet time: 6mins
What is earned income made up of?
Investments
Wages and salaries
Gifts
Interest from savings
How is money earned on an hourly basis classified?
Salary
Wage
Bonus
Commission
What is passive income?
Income that is earned from a full-time job
Income that is earned with very little effort on your part
Income that is only earned from investments in stocks
Income that is earned from performing daily tasks
Which of the following is an example of passive income?
Working as a software developer
Being a landlord and earning rent income
Earning a salary from a 9-to-5 job
Performing freelance work
Which of the following is NOT a passive income idea?
Invest in long-term stocks
Crowdfund real estate
Work as a full-time teacher
Own rental properties
What is Capital Gains Tax?
Tax on the total value of an inherited estate
Tax you owe when you sell something for a profit
Tax on your total annual income
Tax on the purchase of capital assets
Capital Gains Tax can apply to which of the following?
Only stocks
Only real estate
Stocks, bonds, and real estate
Only bonds
What determines the tax rate for Capital Gains Tax?
The price at which the asset was sold
The original cost of the asset
How long you owned the asset
The current market value of the asset
Which statement is true regarding the tax rate for short-term and long-term capital gains?
Short-term gains are taxed at a lower rate than long-term gains
Long-term gains are not taxed
Short-term gains are taxed at a higher rate than long-term gains
Both short-term and long-term gains are taxed at the same rate
Portfolio income includes all of the following EXCEPT:
Dividends
Sold Stocks
Interest earned
Salary from employment
What is the purpose of the W-4 form?
To report your annual income to the IRS
To determine how much money your employer withholds from your paycheck for income taxes
To calculate your eligibility for government benefits
To record your personal identification information for employment records
What could be a consequence of withholding too little from your paycheck?
You will receive a larger paycheck during the year
You will have a larger tax refund at the end of the year
You may owe money during tax season
You will be exempt from paying taxes
