WorksheetsTopic 2: Taxes (1-30)
Total questions: 30
Worksheet time: 15mins
Which of the following best explains why taxes are considered mandatory rather than voluntary?
Taxes are optional payments tied to consumer purchases
Governments require taxes to maintain public services and operations
Individuals may choose whether to fund schools and roads directly
Nonprofit organizations collect taxes on behalf of citizens
Benjamin Franklin’s quote at the start of the presentation highlights taxes alongside what other certainty?
Change
Inflation
Death
Government growth
Which type of tax is collected directly from employee paychecks to fund programs like Social Security and Medicare?
Sales tax
Payroll tax
Property tax
Estate tax
Income tax in the United States is described as “progressive.” What does this mean?
Everyone pays the same percentage of income
Higher portions of income are taxed at higher rates
Lower income earners pay proportionally more
Only wages from jobs are taxed
Which filing status is associated with the highest tax burden?
Head of Household
Married Filing Separately
Single
Married Filing Jointly
Property tax in Florida differs from federal income tax in which way?
It is set and collected locally by counties and municipalities
It applies only to rental properties, not owned homes
It is based on annual income rather than assessed value
It is collected by the IRS through withholding
Sales tax in Florida has both a state and a county component. What is the total rate for Miami-Dade County?
6%
7%
7.5%
8%
Which states are listed as having inheritance or estate taxes?
Florida and Texas
California and Nevada
Maryland and Nebraska
Georgia and New York
In Florida, estate taxation applies only if the estate value exceeds approximately:
$1 million
$5 million
$10 million
$13.61 million
Why might families establish a trust according to the slides?
To avoid sales tax
To protect assets from creditors and ensure dependents are supported
To qualify for Medicare
To eliminate payroll withholding
What is the difference between a tax deduction and a tax credit?
A deduction reduces taxable income, while a credit reduces tax owed
A deduction directly lowers taxes owed, while a credit lowers income
Credits apply only to wages, while deductions apply to investments
Deductions apply only to homeowners, credits apply only to renters
Which credit directly benefits families with dependents under 17?
Earned Income Tax Credit
Child Tax Credit
Education Credit
Saver’s Credit
What makes the Earned Income Tax Credit (EITC) unique?
It is available only to high-income earners
It applies only to homeowners
It is refundable, so taxpayers can receive money even if no tax is owed
It eliminates the need to file
Which form reports wages, withholdings, and benefits from an employee job?
1099
W-2
1040
4868
Which form reports income earned as a contractor or freelancer, with no taxes withheld?
W-2
1099
1040-EZ
4868
What is the federal filing deadline for most individual tax returns?
March 1
April 15
September 15
December 31
Filing Form 4868 extends the filing deadline to which date?
May 1
June 30
October 15
December 31
Why does filing an extension not delay tax payments owed?
The extension is only for paperwork, not for money owed
Extensions are only granted to those with refunds
State governments cover the balance until October
Extensions automatically forgive penalties
What is the purpose of FICA taxes?
To fund property tax collection
To fund Social Security and Medicare programs
To reduce audit risk
To pay state government salaries
Why do high-income taxpayers face increased audit risk?
Their returns are automatically audited
Higher incomes involve complex returns and larger deductions that draw scrutiny
They cannot use tax credits
They do not pay property tax
Which of the following is an example of a red flag that could trigger an audit?
Claiming the standard deduction
Filing electronically
Reporting rounded numbers instead of exact figures
Paying state sales tax
Which capital gains are taxed at ordinary income rates?
Short-term gains on assets held one year or less
Long-term gains on assets held for more than one year
Capital gains from inheritance
Gains on assets under $1,000
Long-term capital gains are generally taxed at which rates?
5% or 10%
0%, 15%, or 20% depending on income
25% or 28%
The same rate as payroll tax
Why is capital gains tax usually lower than income tax on wages?
To encourage long-term investment in assets
Because the IRS cannot track investments
Because states do not collect gains
To make up for property tax differences
Which of the following is an example of tax avoidance rather than tax evasion?
Using education credits to reduce tuition expenses
Hiding income in offshore accounts
Reporting less income than earned
Claiming false dependents
Which of the following is an example of tax evasion?
Contributing to a retirement account
Failing to report income from freelance work
Using the standard deduction
Claiming a child under 17 for the Child Tax Credit
Why might someone choose to hire a Certified Public Accountant (CPA)?
To guarantee a refund regardless of circumstances
To reduce mistakes and get expert advice on deductions, credits, and complex returns
To avoid paying Social Security taxes
To automatically qualify for refundable credits
Which group primarily funds Social Security through payroll taxes?
Only employers
Only employees
Both employees and employers, with matching contributions
Contractors only
Why might a taxpayer in Miami-Dade County owe higher property taxes than the state average?
The county’s effective tax rate is about 1.02%, slightly above the Florida average
Property tax in Miami-Dade is collected by the IRS
Miami-Dade does not apply local surtaxes
Florida has no property tax statewide
Which of the following best summarizes the role of taxes in society?
They provide funds for public services, infrastructure, and government operations
They are optional contributions that replace charitable donations
They exist mainly to fund Social Security and Medicare
They are only applied when individuals inherit wealth
