Preparing for Taxes

Which of the following are legal methods of reducing your current tax liability?

@) b & c

A married couple filing a joint return has Ms. Cindy cook a CPA, complete their return. The IRS will hold only MS. Cook responsible for any errors on the return

False

Mortgage interest and credit card interest are both itemized deduction items

False

The alternative minimum tax is an issue only for high- income taxpayers

False

The federal personal income tax is a regressive tax

False

You are preparing your own tax return. The least costly source for answering your questions would be

IRS 800 numbers

The federal income tax is

Progressive

If you do not wish to itemize deductions, you can use the...

Standard deduction

An investment must be owned over one year in order to qualify for long-term capital gain treatment

True

One's average tax is typically lower than one's marginal tax rate

True

Opening a traditional IRA would allow you to defer taxes on the earning

True

Social Security taxes are paid on external income but not on investment income

True

Tax avoidance is a legal means to minimize tax liabilities

True

The Congress writes and passes the Internal Revenue Code

True

you should itemize deductions when total itemized deductions exceed the standard deduction

True

The federal personal income tax is a regressive tax

false