learnsmart ch 3 FIN

True or false: Only cash contributions to qualified charitable organizations are allowed as deduction.

false

Investment income in the form of dividends, interest, and rent from investments is also called:

portfolio income

Real estate ______ taxes are based on the value of land and buildings.

property

Which of the following are not considered expense records?

w-2 forms

Mortgage interest is reported to you by your mortgage lender on form

1098

Interest, dividend, and capital gains income are reported to the taxpayer and IRS by financial institution on Form ______. The taxpayer reports this to the IRS on a Schedule B form

1099

Adjusted gross income is the gross income after certain _________, such as IRA contributions, penalties for early withdrawal of savings, and alimony payments, have been made.

reductions

Which of the following are examples of earned income?

comissions, salary, wages

A tax Blank______ reduces taxable income, thereby reducing the tax liability.

deduction

A tax ______ is an amount subtracted from adjusted gross income to arrive at taxable income.

deduction

Salary is an example of ______ income

earned

Salary is an example of ______ income.

earned

True or false: Passive income results from business activities in which you participate regularly.

false

The two main types of taxes on wages and salary are federal and state ______ tax and Social Security tax

income

True or false: Casualty and theft deductions are allowed for financial losses resulting from federally declared natural disasters.

true

Estate taxes are calculated on the ______ of a person's property at death.

value

Which of the following is subject to real estate property taxes?

your house

Which of the following is not a deductible tax?

excise tax

True or false: A tax deduction reduces tax liability directly, dollar for dollar.

false

True or false: Social Security taxes are calculated based on the value of your property to fund retirement benefits, while income taxes are imposed on wages.

false

True or false: Income tax is calculated on adjusted gross income less deductions and exemptions.

true

An inheritance tax is paid for the right to acquire the inherited

true

An inheritance tax is paid for the right to acquire the inherited property.

true

True or false: Income includes only those earnings that you are actively involved in earning, such as salaries and income from managing a business. True false question.

false

Your primary ______ should be to pay your "fair-share" of taxes while taking advantage of appropriate tax benefits.

goal

True or false: If you itemize your deductions, you can deduct contributions made to charities and amounts paid for real estate taxes.

true

True or false: Income tax is paid during the year through withholding from paychecks and/or estimated payments.

true

which of the following are types of investment income?

dividends, rent from investments, interest

The amount of money or the value of property that can be gifted each year without being subject to federal gift taxes is:

$15,000 per year per person.

Which of the following statements are true with regard to taxes on wages?

For most people, Social Security tax is 6.2 percent. Income taxes are imposed by federal, some state, and some local governments to fund government operations.

Which of the following is not a deductible charitable donation?

Giving money to a homeless person on the street

Which of the following would have tax deductible interest?

Home mortgage

Which of the following are adjustments to gross income?

IRA contributions Keogh Plans Penalties for early withdrawal of savings

Tax planning starts with which of the following?

Knowing current tax laws

A(n) ______ tax is calculated on the value of property bequeathed by a deceased person.

inheritance

Medical costs, taxes, and interest are all examples of ______ deductions that are subtracted from adjusted gross income

itemized

As "Tax Freedom Day" came in mid-April, it means that the portion of the year people work to pay their taxes is represented by January 1 to:

mid-april

True or false: The two main taxes on salary are income taxes and estate taxes.

false

Components of income include earned, investment, and _____ income

passive

In 2020, individuals are allowed to give money or items valued at $______ or less in a year to a person without being subject to taxes.

15,000

Your ______ income is the basis for computing the amount of tax owed.

taxable

Which of the following is an adjustment to income rather than an itemized deduction?

IRa contributions

Which of the following are types of investment income?

Interest Rent from investments Dividends

Your main goal when tax planning should be which of the following?

Paying your fair share while taking advantage of appropriate tax benefits.

Which of the following are categories of taxes?

Taxes on purchases Taxes on earnings Taxes on property Taxes on wealth

Financial planners recommend that copies of home ownership documents should be kept for

an indefinite

Which of the following types of interest expense is not deductible?

automobile loan interest

A tax imposed on the value of a person's property upon that person's death is called a(n):

estate tax

True or false: Income includes only those earnings that you are actively involved in earning, such as salaries and income from managing a business.

false

Components of income include earned, investment, and ___________ income

passive

The major categories of taxes are taxes on ______, property, wealth, and earnings

purchases

If you are an employee, your employer should withhold a certain amount for taxes from your paycheck while self-employed individuals should make estimated tax payments.

true

Travel expenses should be documented in a daily log with records of mileage, tolls, parking fees, and lodging costs.

true

True or false: Adjusted gross income is gross income reduced for such things as IRA contributions and alimony payments.

true

Which of the following taxes are deductible for the person/family paying them?

Real estate property taxes State income taxes

The value of properties upon which personal property taxes may be assessed include:

boats. farm equipment. automobiles. furniture.