Personal Finance Ch 3

Taxes on earnings that fund old age, survivor, and disability insurance benefits are called

Social security taxes

At the end of the year, employees receive a ____ form that reports annual earnings and the amounts deducted for taxes from their employers.

W-2

Fees, tips, and bonuses are forms of

earned income

A tax imposed on the value of a person's property at the time of death is called a(n)

estate tax

Federal income tax returns must be filed by April 1 of each year.

false

If your tax payments are less than the amount of income tax you owe, you are entitled to a refund.

false

Individuals are allowed to give money or items of any value to a person without being subject to estate taxes.

false

Income that is not subject to tax is called

tax exempt income

Amounts given for tuition payments or medical expenses are not subject to gift taxes.

true

Interest paid on a home equity loan is not deductible.

false

One of the best tax shelters is owning a car.

false

Using tax software will not save a taxpayer any time when preparing Form 1040.

false

Cash and prizes won on television game shows are subject to both federal and state taxes.

true

Every taxpayer receives at least the standard deduction, a set amount on which no taxes are paid.

true

One of the most frequent filing errors is not signing the return.

true