personal finance chapter 3

A tax due on the purchase of gasoline is called a(n)

Excise tax.

In 2011, taxable income was reduced by ______ for each exemption claimed.

$3,700

Using the following table, calculate the taxes for an individual with taxable income of $45,000.

$7,375

Janet is completing her federal income taxes for the year and has identified the amounts listed here. How much can she rightfully deduct? • AGI: $42,000 • Medical and dental expenses: $1,100 • State income taxes: $1,000 • Mortgage interest: $7,000 • Charitable contributions: $1,250

$9,250

Which of the following is NOT a valid form for filing federal income taxes?

1040Z

Fees, tips, and bonuses are forms of

Earned income.

Determining adjusted gross income is the final step in calculating federal income tax. (T/F)

False

Tax tables list average tax rates. (T/F)

False

Recent tax credits include all of the following except the

Graduate learning tax credit.

Nancy is married to Jerry and needs to complete her tax form. They both earn about the same amount of money each year. What filing status would be best for them?

Married, filing a joint return

Individuals can deduct expenses only in excess of 7.5% of adjusted gross income for

Medical and dental expenses.

. A worker's primary goal should be to

Pay his or her fair share of taxes while taking advantage of appropriate tax benefits.

The tax that is a major source of revenue for local governments is called a(n)

Real estate tax.

Income that is never subject to tax is called

Tax-exempt income.

Individuals can file their federal taxes using all of the following except

Fax.