Taxes Review
Quiz by Mitzi Glasgow
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- Q1
What is the income upon which your tax is computed by using a tax table?
Gross income
Net income
Taxable income
Adjusted gross income
30s - Q2
What form do you use to file a tax return with the IRS?
W-2
1040
W-4
I-9
30s - Q3
When you sit down to file your 1040 form, which document(s) should you have in front of you?
W-2 Form(s)
I-9 Form(s)
W-4 Form(s)
Bank account statements
30s - Q4
What is a dependent?
Someone who relies on someone else to provide a quarter or less of their financial support.
Someone who relies on someone else to provide more than half of their financial support.
Someone who is able to financially support himself fully.
Someone who provides financial support for someone else.
30s - Q5
Which statement about filing a tax return is FALSE?
Paper filing your tax return is free, but it takes a lot longer to process and get back a refund if you are owed one.
Filing with a tax professional is often the method that is most susceptible to scams.
People who are not familiar with filing taxes should not use e-filing software, because there is no access for support if they need it.
Filing with a tax professional may be good for those people who got a divorce, bought a house, or changed their financial situation in another major way.
30s - Q6
Which of the following statements about marginal and effective tax rates is TRUE?
Marginal rate is the total amount of money you paid in taxes last year, while effective rate is the refund amount you received last year.
Marginal rate is based on your total income and determines what tax bracket you are in, while effective rate is the average tax rate on your entire income.
Marginal rate is the average tax rate on your entire income, while effective rate is total income and determines what tax bracket you are in.
Marginal rate and effective rate can be used interchangeably, as they mean the same thing.
30s - Q7
All of the following information should appear on your W-2 form EXCEPT...
the amount you paid during the last year for Medicare and Social Security.
your name, address, and employer information.
your interest earned on savings and investments.
your wages, tips, and compensation from that particular employer.
30s - Q8
Jeremy just started a new job and completed his W-4 form. Who should he submit it to?
His spouse
No-one - he keeps it for his records
His employer
The IRS
30s - Q9
Which of the statements about the current U.S. tax system is TRUE?
Your friend tells you his marginal tax rate is 22%. That means that he pays 22% on all of his income.
Our current system is described as being a regressive system because it imposes higher rates on those who earn less.
Everyone in the US who makes more than $12,400 pays one flat tax rate.
Our current system is described as being a progressive system because it imposes higher rates on those who earn more.
30s - Q10
Which of the following statements is TRUE about the cost of living and state and local taxes?
States with HIGHER costs of living have HIGHER state and local taxes.
States with HIGHER costs of living have LOWER state and local taxes.
The cost of living and how much you pay in state and local taxes are not directly related, but they can impact how much extra money you have from each paycheck.
The state and local governments use the cost of living to determine what the tax rates should be.
30s - Q11
Jay filed his taxes and found out he owes money. What is the most reasonable explanation as to why he owes money in taxes?
The IRS is asking Jay for a future advance on his possible taxes for next year.
Not enough money was withheld from his paychecks.
Too much money was withheld from his paychecks.
When filing his taxes, Jay accidentally checked "Married filing jointly" instead of "Single".
30s - Q12
Why should you accurately complete a W-4 form any time you start a new job or change your tax status?
Your W-4 determines your total tax bill at the end of the year.
Your W-4 determines how much Federal income tax money your employer should withhold.
Your W-4 determines how much your employer should withhold for voluntary deductions such as health insurance and retirement investments.
You need a copy of your W-4 to file your tax return annually.
30s - Q13
Willful failure to pay taxes is called ____.
voluntary compliance
tax reduction
tax avoidance
tax evasion
30s - Q14
Money collected by the government through taxes.
Assets
Revenue
Income
Expenses
30s - Q15
Expenses the law allows a taxpayer to subtract from adjusted gross income are called ____.
allowances
exemptions
deductions
tax credits
30s