Personal Finance

What are the four things you need to know about a stock you sell in order to report the sale on your income tax return?

Purchase date, date of sale, original cost plus advisor's fee, sales price plus advisor's fee.

Which of the following types of amounts appear on a statement of assets and liabilities otherwise known as a Balance Sheet?

Balance due on car loan, value of stocks owned, current bills owned.

What are the three levels of health insurance coverage?

Basic, major medical, and disability.

Why do credit unions pay more interest on savings accounts than banks?

Because credit unions are not-for-profit entities, they typically offer a rate of interest that is slightly higher than that which banks offer.

How long should you keep documents relating to the purchase of your house?

For as long as you own the home, as well as three years after you file the tax return for the year in which you sell the home.

What is one way in which you can check your credit history?

Order a credit report from one of the three national credit bureaus.

You purchased a home for $100,000, putting down a $25,000 down payment and financing the balance over 30 years. Seventeen years later the home is worth $170,000 and you owe $55,000 on your mortgage. What is the equity in your home?

$115,000

For 2016, what is the amount you can give to one person in a year without incurring a gift tax?

$14,000

You borrowed $18,000 at 7% annual interest, compounded monthly, and your first payment is due. The payment is $120. How much of that payment is principal and how much interest?

$15 principal, $105 interest

What is the minimum amount of interest you have to earn on a bank account for a bank to be required to send you a notice of the interest at the end of the year?

10

How much of your total monthly income is considered to be a good starting point for adding to your savings?

5%

What is the earliest age at which you can apply for Social Security retirement benefits?

62

What is a definition of a long-term financial goal?

A long-term financial goals that you plan to meet in more than ten years.

What is dollar cost averaging?

A method of frequent, periodic investing of a fixed sum that enables you to weather fluctuations in the market.

What should you do with your budget if some amounts change during the year?

Adjust the amounts in your budget to reflect the reality of your finances.

Which of the following is considered to be a disadvantage to leasing a car instead of purchasing a car?

Annual mileage limits.

When is mortgage interest a tax-deductible expense?

Mortgage interest on your primary home and second are both deductible, only if you itemize your deductions.

What is disability insurance?

Disability insurance provides a replacement for lost income while you are unable to work.

If you own more than one home and you itemize your deductions on your income tax return, how much interest can you deduct for the mortgages on your various homes?

Interest on your primary residence and one other home is deductible. Interest on any other homes is not deductible.

What factors contribute to the ability to take a tax deduction for a contribution to a traditional IRA?

Level of income and participation in tax-deferred retirement plans, amount of earned income, and age.

Besides the obvious fact that you can earn some interest, what is an advantage to putting money in an interest-bearing account with your bank?

Many banks offer free or reduced rates on checking if you have money in savings at the same bank.

For what reason are many income tax deductions limited to less than the full value of the deduction?

Many tax deductions are subject to limitations if you earn income over a certain threshold.

In what types of items does a money market fund invest?

Money Market funds invest in very short-term money market instruments with average maturity of less than 180 days.

What is an insurance deductible?

The amount of insured costs that you are responsible for paying before the insurance coverage begins.

Making a partial payment on a credit card balance when the credit card company charges you 15% interest on amounts not paid currently has what effect on your personal finances?

The earning power the payment is the same as if you deposited the money in an interest-bearing account and earned 15% interest.

How do you calculate the expense ratio of a mutual fund?

The expense ratio is the ratio of the sum of all the fund's operating costs including the fund managers fee to the total earnings of the fund.

Employees give their employer a w-4 tax form to tell the employer what?

The number of exemptions the employee wants the employer to use when calculating the amount of federal income tax to withhold from the employee's paycheck.

What is a ticker symbol?

The ticker symbol is the group of unique letters used to identify a stock or mutual fund on the stock exchange.

What type of mileage records do you need if you plan to report the business use of your automobile on your income tax return?

The total number of miles driven on the car during the year and the number of miles devoted to your business.

When you set up a trust, who actually owns the property that is listed in the name of the trust?

The trust owns the property.

What are the names of the three companies that provide credit reports?

TransUnion, Experian, and Equifax

How does one participate in an initial public offering (IPO) of stock?

Unless you have a personal relationship with a financial advisor who has been allocated some of the shares, it is unlikely you will be able to participate in an initial public offering.

When does your credit history begin?

When you open a bank account or obtain a credit card.

Simply writing a will and putting it away isn't enough. What must you do to make your will official?

You and at least two witnesses must sign and date the will.

If you make too much money you are ineligible to participate in a Roth IRA. What should you do if you made a contribution to a Roth IRA only to find out your income is too high for you to be eligible to allow you to contribute to a Roth?

You can withdraw your money from the Roth IRA. Alternatively, you can convert the contribution to a traditional IRA account. You have until the due date of your tax return to make either of these changes.

What is one important reason for setting up a personal bookkeeping system?

You will have the information you need to set up a budget.