WorksheetsUnit 2 Study Guide
Total questions: 50
Worksheet time: 25mins
Why file Federal & State taxes together?
It is required by law
Filing through the same software reduces chances of rejection and streamlines processing.
It increases your refund
It is faster than filing separately
What is a W-4 Form used for?
Filing taxes directly
Starting a new job or when status changes
Claiming tax credits
Requesting a refund
What does the W-4 Form determine?
Withholding (amount taken from each paycheck for taxes)
Eligibility for health insurance benefits
Retirement plan contributions
Employee's hourly wage
Is the W-4 Form used to file taxes directly?
True
False
Why might someone owe money on taxes?
Not enough was withheld from paychecks.
They received a tax refund.
They paid too much in taxes throughout the year.
They filed their taxes early.
To get a refund, should you increase or decrease withholdings?
Increase withholdings.
Decrease withholdings.
Keep withholdings the same.
Eliminate withholdings entirely.
If too little is withheld from your paycheck, what is the result?
You owe money.
You get a bonus.
You receive a tax refund.
Your paycheck increases permanently.
Credits ______ reduce taxes owed.
directly
indirectly
rarely
never
Tax deductions reduce an individuals ______ income.
taxable
gross
net
earned
What is a W-2 form used for?
Reporting income & taxes withheld from an employer
Reporting income as an independent contractor
Main tax return form
What does a 1099 form report?
Income & taxes withheld from an employer
Income as independent contractor or interest/dividends
Main tax return form
The 1040 is the main ______ form.
tax return
insurance
loan
application
Who is considered a dependent?
Someone supported by more than 50% from another person.
Someone who earns more than 50% of their own income.
Anyone who is over the age of 18.
Someone who files their own tax return.
When is Tax Day?
April 15
March 1
May 10
June 30
Where does the W-4 form go?
Employer
IRS
Bank
How can you pay taxes owed?
Direct bank withdrawal, debit/credit card, or check (not PayPal/Venmo).
Only with cash at the IRS office.
Using PayPal or Venmo only.
By sending cryptocurrency to the IRS.
A debit card means money comes directly from your ______ account.
checking
savings
credit
loan
What are person-to-person payments?
Repaying friends/family (Venmo/Zelle)
Paying utility bills online.
Withdrawing cash from an ATM.
Depositing checks at a bank.
What is an immediate reduction in a checking account?
Debit card use or ATM withdrawal.
Receiving a direct deposit.
Writing a check that has not cleared.
Depositing a check.
What is a benefit of checking accounts?
Safe access, facilitates financial life.
They increase your monthly expenses.
They prevent you from saving money.
They are only for business owners.
They require you to pay extra taxes.
Which of the following is shareholder-owned?
Banks
Credit Unions
Which of the following is member-owned and often has lower fees?
Banks
Credit Unions
Online banking allows for which of the following?
Transfers
Bill pay
Auto-savings
Mobile access
All of the above
Traditional Savings accounts are characterized by ______ interest, safe storage, and easy access.
low
high
variable
having no
A Money Market account typically offers ______ interest and some limits.
moderate
very high
no
negative
A Certificate of Deposit (CD) offers higher interest but requires your money to be ______ for a certain amount of time.
locked
borrowed
shared
donated
Emergency funds are best kept in which type of account for easy access?
Checking account
Savings or money market account
Certificate of Deposit
1% interest usually means ______ (per year).
annual
monthly
weekly
daily
Simple interest is based on the ______ deposit.
original
final
average
monthly
Compound interest is interest on ________.
interest
rate
time
deposit
FDIC Insurance covers deposits up to how much per person, per bank?
$250,000
$100,000
$500,000
$1,000,000
What are the key factors when opening a savings account?
fees, interest rates, minimum deposit
location of the bank, number of ATMs, color of debit card
bank's logo design, branch size, staff uniforms
availability of free coffee, bank's social media presence, building architecture
What is one of the best saving habits mentioned?
Save a percentage of each paycheck first ('pay yourself first').
Spend all your money before saving.
Only save if you have money left at the end of the month.
Borrow money to save more.
Automatic deposits help with saving.
True
False
Emergency Fund use is for real emergencies such as job loss or bills.
True
False
Wealth is determined by ______ minus debts, not just income or possessions.
assets
income
expenses
savings
What does SMART stand for in SMART Goals?
Specific, Measurable, Achievable, Relevant, Time-bound
Simple, Manageable, Accurate, Reliable, Timely
Strategic, Motivational, Actionable, Realistic, Trackable
Systematic, Meaningful, Attainable, Reasonable, Tangible
According to the 50/30/20 Rule, what percentage of your income should go to needs?
50%
20%
30%
40%
According to the 50/30/20 Rule, what percentage of your income should go to wants?
30%
10%
50%
20%
According to the 50/30/20 Rule, what percentage of your income should go to savings or debt repayment?
20%
10%
30%
50%
What is a Zero-Based Budget? A Zero-Based Budget is when you allocate every dollar until income minus expenses equals ____.
0
100
Your savings
A surplus
Which of the following is a variable cost?
Rent
Car payments
Electricity
None of the above
Which of the following is a fixed cost?
Groceries
Electricity
Rent
None of the above
When analyzing budgets, what should you look for? Look for ______/deficits.
surpluses
expenses
revenues
investments
What should you adjust if you are overspending in your budget? Adjust ______ spending if overspending.
discretionary
mandatory
fixed
essential
What is the role of a financial planner? The role of a financial planner is to give ______, not make decisions for you.
advice
orders
money
guarantees
When choosing a financial planner, what should you look for? Look for certifications (_____, _____), fiduciary responsibility.
CFP, CFA
CPA, MBA
FRM, CAIA
CMA, ACCA
What does bank reconciliation involve? Bank reconciliation problems require adjusting for outstanding checks, deposits in transit, service charges, fees, ______ checks, and interest.
bounced
signed
endorsed
printed
What is the impact of a government shutdown on budgets? Delayed benefits/paychecks affect ______.
income
holidays
weather
education
In times of financial difficulty, families must cut _______ costs and rely on _______ funds.
variable, emergency
fixed, savings
luxury, investment
essential, surplus
