WorksheetsPersonal Financial Literacy Assessment: Standard 2. Taxes
Total questions: 10
Worksheet time: 5mins
It is the civic responsibility and social obligation for every citizen and resident to pay _____ which provide for public needs and services, such as roads, schools, sanitation, law enforcement, and national defense.
property taxes
state and federal income taxes
local sales taxes
all of the above
There are two basic theories behind taxes. Most nations will use a combination of the two theories to achieve a greater balance and sense of fairness to their overall tax policies. The _____ theory says that people who earn more should pay more taxes than those with limited income.
benefits received
regressive
ability to pay
free rider
The "benefits received" theory of taxation is based on the idea that government should tax only the people who directly receive or use the goods and services provided by those taxes. Which of the following is NOT a tax based on this theory?
only people with children are taxed for building schools
only people who are retired pay Social Security taxes
only people over the poverty line pay state income tax
only people out of work pay for unemployment benefits
The two theories of taxation have resulted in creating a tax system with different kinds of taxes. By definition, a _____ tax is one in which the proportion of income paid in taxes increases as income increases.
regressive
progressive
voluntary
involuntary
The ____ is an example of a progressive tax; as a person’s income increases, their tax rate increases.
federal income tax
property tax
sales tax
driver’s license fee
The _____ is charged with the responsibility of maintaining and enforcing the federal tax system. To ensure people obey the law, this agency has the right to audit a person’s annual tax return.
Department of Revenue
Internal Revenue Service
Tax Auditing Agency
Social Security Administration
Which of the following is NOT true about tax responsibilities of all citizens and residents of Oklahoma?
Submit a tax return by April 14 each year
Keep records of income and deductions claimed
File a state income tax return
Decide the amount of income to claim
If the IRS determines that you willfully committed fraud on your tax return, which of the following is NOT a possible consequence?
forced to pay a penalty (fine)
found guilty of a felony and imprisoned
charged interest on unpaid taxes
loss of voting rights
While people in the United States are required to pay taxes, the system operates on a principle called _____. This means that what you report as expenses, deductions, and earnings is a personal decision even though the law is specific about what is legal.
involuntary compliance
tax liability
voluntary compliance
the auditing process
Failing to pay taxes is high risk. Which of the following is NOT good advice for avoiding problems related to paying your taxes?
pay less than you are required to pay
file your income tax return on time
keep good records of your income and expenses
be honest with the information you report
