Study Questions 1 Ch 3&4
what kind of audit requires that a taxpayer visit an IRS office to clarify some aspect of his or her tax return
Office audit
The affordable care act of 2010, or Obama care, required taxpayers to Pau a tax penalty if they were not able to confirm that they had health care coverage. This penaltyy has been eliminated by the Tax cuts and jobs act for the year starting in
2019
Single with kids maximum amount of income tax credit
6431
a taxable investment produced interest earnings of $1,200. A person in a 22 percent tax bracket would have after-tax earnings of
936
Chris carter needs to store monthly statements from his credit card company and savings accounts. What is the most appropriate place for Chris to store this money
his home filing cabinet
for 2018, which form would a married individual with less than $100,00 in taxable income use to file his federal income tax return
Form 1040EZ
a personal balance sheet presents
Items owned and amounts owed
what statement is true regarding a tax credit
a tax credit reduces the amount of taxes owed
low gross income how much is the itemized deduction
the same as the amount of property tax
using spreadsheet software for budget
computerized budget
tax avoidance refers to the use of illegal actions to reduce one's taxes
fals
for many years, the United States ranked highest among industrial nations in savings rate
false
opportunity costs are only associated with money management decisions involving long-term financial security
false
the principal purpose of taxes is to control economic conditions
false
Elaine's Embroidery Emporium which is run out of Elaine's home is visited by an IRS agent who wants to verify the office expenses Elaine claims are valid. What type of IRS audit is this?
field audit
an example of a liquid asset is
money in a checking account
Leeanna uses a computer to organize her personal financial records and update her budget activites. This is an example of
money managment
which one of these investments produces tax-exempt income
municipal bond
The difference between net assets and net liabilities is
net worth
earnings from a limited partnership
passive
what documents should be used to calculate a person's solvancy
personal balance sheet
what is considered to be personal financial statements
personal balance sheet and cash flow statemtn
a person's net worth would increase as a result of
reducing the amounts you owe to others
the 50/30/20 rule of thumb suggests that 20 percent of income be used for
savings
itemized deductions are filed
schedule a
taxable income is used to compute the amount of
tax an individual owes to the government
an IRA, Keogh plan, and 401(k) plan are examples of
tax-deffered retirement plans
An office audit requires that a taxpayer visit an IRS office to clarify some aspect of his or her tax return.
true
The tax cuts and jobs act simplified the basic form used when filing your taxes, so that there is now only one form, form 1040, to report your income
true
a person's net worth is the difference between the value of the items owned and the amounts owed to others
true
insolvency occurs when liabilities exceed available assets
true
A person's filing status is affected by marital status and dependents.
ture
changes in cost of living
vary depending where you live
earned income
wages
Amy writes what she plans to spend in various categories
written budget
