WorksheetsChapter 4 Quiz Fin Lit
Total questions: 52
Worksheet time: 3hrs 36mins
Which of the following refers to financial obligations imposed on individuals and businesses by government entities?
Taxes.
Public service.
Loan.
Social welfare.
Most working adults will pay the following types of taxes:
federal income taxes.
payroll taxes.
sales taxes.
All of these answer choices are correct.
Which of the following refers to a tax that is paid whenever a transaction occurs?
Federal income taxes.
Payroll taxes.
Sales taxes.
Property taxes.
Which of the following refers to a tax that is paid throughout the year as income is earned?
Payroll taxes.
Sales taxes.
Property taxes.
All of these answer choices are correct.
Which of the following refers to a tax that imposes the same tax rate on all taxpayers subject to the tax?
Regressive tax.
Flat tax.
Progressive tax.
Federal income tax.
Which of the following refers to a tax that applies higher tax rates to higher-income households?
Regressive tax.
Flat tax.
Progressive tax.
Sales tax.
Which of the following refers to tax revenue exceeding annual expenditures?
Federal surplus.
Federal deficit.
U.S. debt.
Federal income tax.
What was the approximate value of the U.S. federal debt in 2018?
$10 billion.
$20 billion.
$10 trillion.
$20 trillion.
Which of the following refers to the government agency that is charged with collecting and enforcing tax laws?
U.S. President’s Office.
Internal Revenue Service (IRS).
Congress.
Federal Bureau of Investigation.
Mia buys a shirt for $35. The sales tax rate is 7%. How much is her total cost for the shirt?
$35.
$40.
$2.45.
$37.45.
Which of the following refers to the form that shows the federal income tax formula?
W-2.
Form 1040.
Form 1099.
W-4.
Which of the following refers to your income after deductions?
Gross income.
Adjusted gross income (AGI).
Assessed income.
Tax formula.
Which of the following refers to the standard tax form that can be used to file taxes?
Form 1040.
W-2.
W-9.
1099.
Which of the following is a filing status?
Single.
Married filing jointly.
Generally, filing a joint tax return with your spouse results in a _____ tax liability compared with filing separately?
Lower.
Higher.
The same.
Zero.
Which of the following filing statuses would be appropriate for someone who is unmarried and has no dependent children or relatives?
Single
Married filing jointly
Married filing separately
Head of household
Which of the following filing statuses would be appropriate for someone who is unmarried and is the primary provider of a qualifying dependent?
Single.
Married filing jointly.
Married filing separately.
Head of household.
Which of the following is included in your gross income?
A scholarship for tuition.
Scholarships and grants in excess of tuition and books.
Money received from selling your personal residence.
A scholarship for books.
Common itemized deductions include which of the following?
Qualifying charitable deductions.
Unreimbursed employee expenses.
State and local taxes.
All of these answer choices are correct.
Which of the following refers to income derived from work, interest, and self-employment?
Capital gain income.
Gross income.
Ordinary income.
AGI.
Which of the following refers to predefined range of taxable income in which a single tax rate applies?
Marginal tax rate.
Tax bracket.
Withholdings.
Effective tax rate.
Which of the following results from selling a capital asset at a gain when the asset was owned for less than a year?
Long-term capital gains.
Short-term capital gains.
Withholdings.
Ordinary income.
Which of the following results from selling a capital asset at a gain when the asset was owned for more than a year?
Long-term capital gains.
Short-term capital gains.
Withholdings.
Ordinary income.
Long-term capital gains are most commonly taxed at what rates?
0% or 10%.
0% or 15%.
15% or 25%.
15% or 35%.
What happens to the tax brackets if your filing status changes from single to married?
The same tax rates apply, but the tax brackets are larger so that more of your income is taxed at higher tax rates.
The same tax rates apply, but the tax brackets are smaller so that more of your income is taxed at lower tax rates.
The same tax rates apply, but the tax brackets are larger so that more of your income is taxed at lower tax rates.
A different tax rate applies.
If you could have all your income taxed at the lower capital gains tax rates, you would be able to accumulate after-tax wealth:
slower
faster
at the same rate
All of these answer choices are correct
How are short-term capital gains taxed?
0%
15%
25%
Same rate as ordinary income
Which of the following refers to a tax credit that can reduce an individual’s assess tax below zero?
Refundable tax credit.
Nonrefundable tax credit.
Deduction.
Negative effective tax rate.
Which of the following is a refundable tax credit?
Lifetime Learning Credit.
Earned income tax credit.
Retirement Savings Contribution Credit.
Child Tax Credit.
Which of the following refers to a tax credit that is partly refundable and is available to whomever claims the students as a personal exemption on their tax return?
Lifetime Learning Credit.
American Opportunity Credit.
Retirement Savings Contribution Credit.
Child Tax Credit.
Which of the following refers to a tax credit that is available to taxpayers who do not qualify for the American Opportunity Credit?
Lifetime Learning Credit.
Earned income tax credit.
Retirement Savings Contribution Credit.
Child Tax Credit.
Which of the following refers to a tax credit that is refundable and designed to reward work and boost the income of low-income workers?
Lifetime Learning Credit.
Earned income tax credit.
Retirement Savings Contribution Credit.
Child Tax Credit.
What percentage of your paycheck is automatically withheld for taxes?
10%
20%
30%
40%
Which of the following is more valuable for the tax payer?
$1,000 tax credit.
$1,000 tax deduction.
A tax credit and a tax deduction are the same values.
Child Tax Credit.
If you had too much in taxes taken out of your paycheck, what might you qualify for?
A tax credit.
A tax deduction.
A refund.
A loan.
How does increasing your number of exemptions affect your paycheck?
It will decrease the amount of taxes automatically withheld.
It will increase the amount of taxes automatically withheld.
It will more than double the amount of taxes automatically withheld.
No change in your paycheck.
Which of the following describes a self-employed individual?
Paid only when working.
Pay for all of their expenses related to work.
Make quarterly estimated tax payments.
All of these answer choices are correct.
Which of the following refers to a statement that an employee receives at the end of the year to summarize earned income?
W-2.
1099.
1040.
W-9.
Which of the following refers to a statement that a self-employed individual receives at the end of the year to summarize earned income?
W-2.
1099.
1040.
W-9.
Which of the following describes an employee?
Paid an hourly wage for a guaranteed number of hours each week.
May incur some expenses in carrying out job duties.
Taxes are withheld from the paycheck.
All of these answer choices are correct.
Which of the following refers to the national health insurance program for individuals 65 years and older?
Medicaid.
Social Security.
Medicare.
Federal Insurance Contributions Act (FICA).
Which of the following refers to the form that self-employment income and related expenses are more often reported on?
W-9.
Schedule C.
1099.
W-2.
From an employer’s perspective, which of the following is an advantage of classifying workers as self-employed contractors?
It lowers the overall amount of taxes the employer must pay.
It increases the amount of taxes workers must pay.
It lowers the overall amount of taxes the employer must pay and it increases the amount of taxes workers must pay.
None of the above answers are correct.
Which of the following might a self-employed individual deduct when calculating AGI?
Some of the costs of their home.
Miles driven for business.
Supplies for business.
All of these answer choices are correct.
The Medicare tax is formally known as what?
FICA.
Health insurance.
Medicaid.
1099.
Which of the following refers to the legal, systematic structuring of transactions to minimize taxes?
Tax avoidance.
Tax loopholes.
Tax evasion.
Tax advantage.
Which of the following refers to the legal strategies to reduce the amount of taxes owed?
Tax avoidance.
Tax loopholes.
Tax evasion.
Tax advantage.
Which of the following occurs each time you convert one asset into a different one for a gain?
Tax avoidance.
Tax loopholes.
Realized income.
Recognized income.
Which of the following is an example of realized income?
Converting your human capital into a paycheck.
Converting a coin collection into cash by selling it.
Converting good grades in school into a scholarship that pays your tuition and fees.
All of these answer choices are correct.
Which of the following is a retirement savings account that you contribute money to and then use to purchase investments?
Roth IRA
Tax exemption
Municipal bond
529 savings plan
The standard mileage rate deduction can be used for miles associated with which of the following?
Business.
Medical.
Charitable activities.
All of these answer choices are correct.
Max drove 3,500 miles for charity, and the charitable-related mileage rate is $0.14. How much is his mileage deduction?
$500.
$490.
$250.
It’s not deductible.
