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WorksheetsChapter 15 Terms and Vocabulary Test
Total questions: 25
Worksheet time: 15mins
The Definition of Retirement Savings Contribution Credit is...
Federal income tax credit to help lower-income workers save and invest for retirement.
Federal tax levied on certain imports.
Funds subtracted from an employee.’s pay by an employer and forwarded to the federal government
What is the method of submitting income tax forms electronically preferred by the IRS and state governments?
e-filing
paper filing
faxing
mailing
What is the money received from an employer for work, as well as any income from self-employment called?
earned income
passive income
investment income
gift income
What is the principle that a fair tax is one that takes into consideration the taxpayer’s relative wealth and income when determining the amount of tax levied?
ability to pay principle
benefit principle
proportional tax principle
regressive tax principle
What is the principle that it is fair for those who receive the benefit of tax expenditure to pay the tax?
benefits received principle
ability to pay principle
equal distribution principle
progressive tax principle
What is the process during which the IRS reviews the information in your tax return and requests additional information from you?
audit
filing
assessment
payment
What is the profit made on an investment held for a year or longer called?
long-term capital gain
short-term capital gain
dividend income
interest income
What is the profit made on an investment held for less than a year called?
short-term capital gain
long-term capital gain
dividend income
interest income
What is the qualification that can result in a certain amount of income being exempt from taxes?
exemption
deduction
credit
allowance
What are the qualified expenses that reduce your federal Form 1040 taxable income called?
What are the qualified expenses that reduce your taxable income on your federal Form 1040 called?
adjustment to income
deductions
credits
exemptions
What is the tax credit that pays up to 100% of qualified tuition and expenses such as books and course materials for college students in their first four years of undergraduate study?
American Opportunity Credit
Lifetime Learning Credit
Hope Credit
Tuition and Fees Deduction
What is the tax that is usually levied and collected at the state and local level on certain goods and services?
sales tax
income tax
property tax
luxury tax
What is the tax levied by the federal and state governments on specific goods and services that is included in the retail cost?
excise tax
sales tax
income tax
property tax
What is the tax levied on a person’s assets after they die?
estate tax
income tax
sales tax
property tax
What is the tax levied on the heirs or recipients of an estate?
inheritance tax
estate tax
gift tax
capital gains tax
What is the tax that is levied at the federal, state, and local level on earnings through work or investment?
income tax
sales tax
property tax
capital gains tax
What is the tax that is levied on real estate, typically at the local level?
Property Tax
Income Tax
Sales Tax
Value Added Tax
What is the tax that takes a larger percentage of income from low-income earners than from high-income earners?
regressive tax
progressive tax
proportional tax
flat tax
What is the actual rate of taxation determined by dividing the tax paid by the taxable income?
effective tax rate
marginal tax rate
average tax rate
nominal tax rate
What is the agency that implements and enforces federal tax policy and collects tax revenues?
Internal Revenue Service (IRS)
Federal Reserve
Department of Commerce
Social Security Administration
What does it mean to impose or collect a tax?
levy
borrow
lend
donate
Fill in the blank: ________ is the total taxable income reported on your federal Form 1040 minus any adjustments to income.
Adjustable Gross Income (AGI)
Gross Income
Net Income
Taxable Income
A ________ is a type of tax that takes a larger percentage of income from the wealthy or high-income earners than from the poor or low-income earners.
progressive tax
regressive tax
flat tax
sales tax
Fill in the blank: A ________ is a type of tax that takes the same percentage of wealth or income from all.
proportional tax
progressive tax
regressive tax
flat tax
