Ramseys Foundations in Personal Finance Chapter 10 Income and Taxes questions

To punish people who make more money

To discourage people from working

To give money to the wealthy elite

To fund government services and programs

Gross income is the total amount earned including bonuses, while net income is the amount earned without bonuses.

Gross income is the amount earned after taxes and deductions, while net income is the total amount earned before taxes and deductions.

Gross income is the amount earned from investments, while net income is the amount earned from a job.

Gross income is the total amount earned before taxes and deductions, while net income is the amount earned after taxes and deductions.

Wages, tips, bonuses, and rental income

Gifts from family members

Interest earned on a savings account

Money earned from selling personal possessions

A form used to indicate employee benefits such as health insurance and retirement plans.

A form used to apply for a job.

A form used to report income earned from freelancing or self-employment.

A form that employees fill out to indicate how much money should be withheld from their paychecks for taxes.

A tax deduction is only available for wealthy taxpayers, while a tax credit is available for all taxpayers.

A tax deduction is only available for certain types of income, while a tax credit is available for all types of income.

A tax deduction reduces the amount of taxable income, while a tax credit directly reduces the amount of tax owed.

A tax deduction reduces the amount of tax owed, while a tax credit reduces the amount of taxable income.

To create a system of wealth redistribution.

To determine how much tax should be paid based on income.

To discourage people from earning more money.

To ensure that wealthy people pay more taxes than poor people.

A loss incurred from the sale of an asset such as stocks or real estate.

A profit made from the sale of an asset such as stocks or real estate.

The amount of money earned from rental income.

The amount of money earned from interest on a savings account.

A standard deduction reduces the amount of tax owed, while itemized deductions reduce the amount of taxable income.

A standard deduction is only available for certain types of income, while itemized deductions are available for all types of income.

A standard deduction is a set amount that can be deducted from taxable income, while itemized deductions are specific expenses that can be deducted.

A standard deduction is only available for wealthy taxpayers, while itemized deductions are available for all taxpayers.

An official examination of an individual or organization's tax returns by the Internal Revenue Service (IRS).

A way for taxpayers to avoid paying taxes.

A method for the government to collect additional taxes from wealthy taxpayers.

An opportunity for taxpayers to get a refund on their taxes.

You may have to pay penalties and interest on the amount owed.

You may be audited by the IRS.

You will receive a refund for any taxes owed.

You will not be able to file taxes in the future.

Money earned from freelance work

Income received from investments

Total salary or wages earned before any deductions

Salary paid after taxes

A W-2 is used for employees and shows their income earned and taxes paid, while a 1099 is used for independent contractors and shows their income earned but not taxes paid

A W-2 and a 1099 are the same thing

A W-2 and a 1099 are unrelated forms

A W-2 is used for independent contractors and shows their income earned and taxes paid, while a 1099 is used for employees and shows their income earned but not taxes paid

April 15th

March 15th

June 15th

May 15th

Income that is only taxed by state and local governments

Income that is taxed at a lower rate than other income

Income that is not subject to federal income tax

Income that is subject to federal income tax

To promote financial literacy

To provide financial aid to citizens

To collect taxes and enforce tax laws

To regulate the stock market