chapter 12 review
taxpayers maintain good records to
-prepare tax returns -identify sources of income -keep track of expenses
what information is included on the form W-2?
-the amount withheld from your paycheck for federal and local taxes -your amount due -your annual earnings -your refund amount
What is the criteria for completing a 1040EZ instead of a 1040 or 1040A?
-under 65 -claim no dependents -income consisted of wages, salaries, and tips are no more than 1500 of taxable interest - taxable income is less than 100,000 you will not itemize deductions
Charlissa is 20 years old and a full-time student. She earned $6,000 in her part-time job. Her parents provided more than half of her support. How many exemptions can Charlissa claim on her tax return?
0
Filing an extension gives you more time to pay any taxes you owe.
False - Extension is an extended deadline for FILING an income tax return.
The amount of federal income tax an employer withholds to send to the IRS depends on your tax credits.
False - allowances
Used to authenticate an electronically transmitted tax return
PIN
tax deduction
an expense that you can subtract from our adjusted gross income to figure your taxable income
What article grants the U.S. Government the power to establish and collect taxes?
article 1
some states collect a personal property tax on______
automobiles
earned income includes__________
bonuses from work
a person must use Form 1040 if he or she is
deducting a medical expense
which option is available for a taxpayer receiving a refund
direct deposit
who completes form W4? and when?
employee and before they can receive a paycheck
which amounts are not included in your gross income?
exclusions
form 1040A is the easiest tax form to complete.
false- 1040EZ is the easiest tax form to complete
an exemption increases the income that is subject to tax
false- an exemption decreases the income that is subject to tax
employees send their payroll taxes directly to the federal government
false- employer send their employee's payroll taxes directly to the federal governement
gross pay is the amount of pay the employee takes home
false- take home pay or Net Income
exclusion
income that is not taxed
withhold
portion of an employee's wages that is not included on his or her paycheck because it is remitted directly to the federal, state, and local tax authorities
Sally has never been married, lives alone, and has paid all the expenses of keeping up a home for herself and no one else. What is Sally's filing status?
single
earnings on a traditional IRA are_____
tax deferred (paid at a later date)
a tax credit is subtracted from
taxes owed
tax liabilty
the total amount of taxes owed
A taxpayer cannot claim a personal exemption on his or her own tax return when he or she can be claimed as a dependent on another taxpayer's return.
true
An estate tax is a federal tax on the value of a person's property at the time of his or her death.
true
The highest standard deduction (the amount of money they set aside and do not tax) amount is associated with the married filing jointly and qualifying widow(er) with dependent child filing statuses.
true
a tax audit is a detailed examination of your tax return by the IRS
true
a taxpayer and his or her spouse can each claim a personal exemption
true
the higher the standard deduction amount, the lower the taxable income
true
the lowest standard deduction amount is associated with the single and married filing desperately filling statuses
true
taxable income
your adjusted gross income less any allowable tax deductions and exmeptions
adjusted gross income
your gross income after calculating certain reductions
If you are self-employed, you must make estimated tax payments to the IRS throughout the year.
True
Employers use which form to compute the amount of federal income tax to withhold?
W-4
exemption
a deduction from adjusted gross income for the taxpayer, the spouse, and qualified dependents
estate tax
a federal tax collected on the value of a person's property at the time of his or her death
income tax return
a form on which a taxpayer reports how much money he or she received from working and other sources, and the exact taxes that are owed
inheritance tax
a state tax collected on the property left by a person to his or her heirs in a will
Mr. and Mrs. Song file a joint return. They have no children or dependents. They cannot be claimed as dependents on any other tax return. How many exemptions can the Songs claim on their joint tax return?
2
social security tax rate is
6.20%
Property tax is the primary source of revenue for the federal government.
FALSE - Income Tax
A taxpayer must provide more than half of a dependent's support to claim him or her on the tax return.
TRUE