Personal Finance Unit 2.1 Planning Your Tax Strategy

Which of the following is not true concerning Income Tax Refunds?

It is advantageous to receive a large sum of money in the form of a refund so that you can use the money to pay down debt.

Which of the following is not true about your adjusted gross income?

It is your income plus your deductions

Which of the following is true about standard deductions?

They are tax breaks that you can claim without having to itemize

A form of taxation in which the highest income earner pays the largest percentage of taxes is called a ________.

progressive tax

A form of taxation in which the lowest income earner pays the largest percentage of taxes is called a ________.

regressive tax

When claiming dependents, they must meet the following criteria EXCEPT:

the dependent must reside with you for the entire year.

If you opt to put money in a medical flexible spending account rather than trying to amass enough medical expenses to itemize on your tax return, you are taking advantage of ______.

an exclusion

A dollar-for-dollar reduction in your tax payment is called a ________.

credit

A form of taxation in which everyone pays an equal rate of taxes is called a _________.

flat tax

Which of the following is not considered part of your gross income?

money your employer pays for your medical insurance