personal consumer and finance chapter 3 and 4

Shannon is working on her federal income tax form and wants to determine if she should itemize her deductions. She has identified several possible deductions. Which of the following is an acceptable deduction? $10,000 gift to her cousin Credit card interest Medical and dental expenses that exceed 10% of AGI Miscellaneous expenses that exceed 2% of AGI Moving expenses for a new job that is 25 miles from her old home

Medical and dental expenses that exceed 10% of AGI

A drawback of a regular savings account is the: Easy access to deposits. Lack of insurance. Low minimum balance. Relatively low rate of return. Ease of withdrawal.

Relatively low rate of return.

Which of the following is a type of electronic payment? Certified check Interest-earning checking account Money order Smart card Traveler's check

Smart card

Joseph needs to complete his income taxes for the year. He has already calculated his adjusted gross income. What does he need to do next? Add his tax-exempt income. Subtract his itemized deductions. Add his tax credits. Subtract his tax-exempt income. Add his tax exemptions.

Subtract his itemized deductions

If Brenda wants to pay her fair share of taxes, no more and no less, she should practice: Tax evasion. Tax avoidance. Tax elimination. Tax maximization. Tax acceleration.

Tax avoidance.

At the end of the year, employees receive a ____ form that reports annual earnings and the amounts deducted for taxes from their employers. 1040 1099 W-2 W-4 Schedule A

W-2

If Diane was in a 25% tax bracket and received a $1,000 tax credit, by how much would her taxes be reduced? $25 $50 $250 $500 $1,000

$1,000

Victor read the fine print for a checking account he was thinking about using. The fine print said, "A minimum balance of $500 is required. If your balance falls below this level, you will be assessed a monthly fee of $10." Since Victor was planning to keep only a $50 balance in his account, how much could he be charged each year? $0.00 $10.00 $50.00 $60.00 $120.00

$120.00

Sam and Diane are completing their federal income taxes for the year and have identified the amounts listed here. How much can they rightfully deduct? (Assume itemized deductions) AGI: $80,000 Medical and dental expenses: $9,000 State income taxes: $3,500 Mortgage interest: $9,500 Qualified charitable contributions: $1,000

$15000

If Jack was in a 25% tax bracket and received a $1,000 tax deduction, by how much would his taxes be reduced? $25 $50 $250 $500 $1,000

$250

Given the information here, what should Jason's adjusted checkbook balance be? Bank balance:$ 600 Outstanding checks:$ 260 Deposit in transit:$ 100 ATM fees:$ 50 Interest earned:$ 10 Checkbook balance:$ 480 $113 $171 $440 $242 $300

$440

Evan had three accounts as listed below. In 2020, how much was his total insurance coverage by the FDIC? Bank A: $150,000 Bank B: $50,000 Bank C: $350,000 $150,000 $200,000 $350,000 $450,000 $550,000

$450,000

Using the following table, calculate the taxes for an individual with taxable income of $45,000. 10%Up to $9,875 12%$9,876-$40,125 22%$40,126-$85,525 24%$85,526-$163,300 32%$163,301-$207,350 35%$207,351-$518,400

$5,690.00

The maximum that an individual can contribute to a Roth IRA for the 2020 year is: $1,000. $3,000. $6,000. $10,000. $15,500.

$6,000

What would be the annual percentage yield for a savings account that earned $67 in interest on $1,000 over the past 365 days? (Enter your answer as a percent rounded to 1 decimal place.) 67/1000

.067

What would be the average tax rate for a person who paid taxes of $10,417.77 on taxable income of $81,580? (Enter your answer as a percent rounded to 2 decimal places.)

12.76%

George Franklin paid taxes of $4,375 on a taxable income of $32,000. What was his average tax rate? 10% 13.7% 15% 25% 28%

13.7%

A certificate of deposit often charges a penalty for withdrawing funds before the maturity date. If the penalty involves two months of interest, what would be the amount for early withdrawal on a CD paying 8 percent and valued at $22,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.) $22,000 x .08 x 2/12

293.33

What is the APY for a savings account with a $250 balance that receives $9 interest for the year? 2.5% 3.6% 4.32% 10.4% 20.8%

3.6%

Nicholas earned 8 percent in his savings account. If he is in the 28 percent tax bracket, what is his after-tax savings rate of return? 2.5% 3.6% 5.76% 7.2% 28%

5.76%

Reginald Sims deposits $9,500 each year in a tax-deferred retirement account. If he is in a 12 percent tax bracket, by what amount would his tax be reduced over a 20-year time period?

50400

A payday loan company charges 4.6 percent interest for a four-week period. What would be the annual interest rate from that company? (Assume an even 52 weeks per year. Enter your answer as a percent rounded to 1 decimal place.) .042 x (52/4)

59.8%

Fred has been completing his own tax returns for years. The IRS has recently contacted him with questions about some of his prior returns. How many years back is he responsible for providing documentation? Until he files his returns 3 year 6 years 10 years 15 years

6 years

Evan is not concerned about immediate tax benefits but instead wants his investment to grow in value on a tax-free basis. Which of these would be the best for him to invest in today? Municipal bonds A tax-deferred annuity A Section 529 savings plan A 401(k) plan A Roth IRA

A Roth IRA

Which of the following is NOT required when writing a check? The amount of check written in words The date written A driver's license number The name of the person or organization receiving payment A signature

A driver's license number

Which of the following primarily provides loans for home purchases? A credit card company An investment company A life insurance company A mortgage company A payday loan company

A mortgage company

Shelby has an account at a financial institution that will waive the monthly fee if she keeps a certain amount in savings. What kind of account does she have? A regular checking account An activity checking account An interest-earning checking account A share draft account All of these are correct.

A regular checking account

A time deposit is also known as: A checking account. A trust. A loan. A savings account. All of these are time deposits.

A savings account.

If you want to buy a relatively large quantity of U.S. savings bonds, you may purchase them through: The state government office. The executive branch. A beneficiary. The local government office. A TreasuryDirect account.

A treasuryDirect acount.

Claudette's grandchildren are 7 and 9 years old. When Claudette passed away, her grandchildren inherited her money. However, the will stipulated that they should not get control of the money until age 25. Which of the following should be set up to provide for the management and control of the funds? A checking account A trust A loan A savings account A certificate of deposit

A trust

Connie thinks that her salary and tax rate for next year will be lower than for this year. What step should she take to minimize her taxes in the current year? Accelerate receipt of income Delay deductions Practice tax evasion Accelerate deductions None of these will allow her to minimize her taxes.

Accelerate deductions

David thinks that his salary and tax rate for next year will be higher than for this year. What step should he take minimize taxes for this year and next year? Delay receipt of income Delay filing taxes Accelerate receipt of income Accelerate deductions None of these will allow him to minimize his taxes.

Accelerate receipt of income

Tax assistance sources include all of the following except: IRS publications. IRS phone hotline. The Ernst & Young Tax Guide. The Internet. All of these are tax assistance sources.

All of these are tax assistance sources.

In general, which fees have doubled or tripled in price at some financial institutions for checking accounts? Overdraft fees. Stop-payment orders. Check printing. None of these fees have increased. All of these fees have increased.

All of these fees have increased.

Preston never opened his bank statements, so he was surprised to see that he had incurred a service charge because his balance went below a required minimum balance. In addition, he did not earn interest for this month. What kind of account does Preston have? A regular savings account An activity checking account An interest-earning checking account A passbook account All of these choices are correct.

An interest-earning checking account

Which of the following offers a full range of financial services including checking, savings, lending, and other services? A commercial bank A check-cashing outlet A pawnshop A payday loan company A rent-to-own center

Commercial bank

Which of the following refers to the opportunity to withdraw your money on short notice without incurring a loss in value? Compounding Liquidity Minimum deposit Rate of return Safety

Liquidity

The rate used to calculate the tax due on the next dollar of income is referred to as the: AMT. Average tax rate. Income tax rate. Marginal tax rate. Total tax rate.

Marginal tax rate.

Allison has returned to school after five years out of the work force. She is taking one course at the local university for a cost of $1,560. To minimize her taxes, should she take a tuition and fees deduction or an education credit? (Assume a 15 percent tax rate.) (Assume the education credit will equal the entire cost of the course.)

education credit

A tax imposed on the value of a person's property at the time of death is called a(n): Estate tax. Excise tax Income tax Real estate property tax. sales tax

estate tax

If $4,359 were withheld during the year and taxes owed were $4,140, would the person owe an additional amount or receive a refund? What is the amount? (Enter the amount as a positive value.)

receive refund -$219