PF Review -Q2

State income taxes and real estate taxes are both itemized deduction items. T or F

True

For tax purposes, head-of-household refers to a. the person with the larger income when a couple is filing a joint return. b. the spouse who has the only income for a couple filing a joint return. c. a single individual who owns a home. d. a single individual with dependents. e. a widow(er) with no dependents but with debts from death of spouse three years earlier.

d. a single individual with dependents.

Marginal tax and average tax rate refer to the same thing

False

The personal exemption for a student can be taken both by the parent and by the child. T or F

False

You should itemize deductions when total itemized deductions exceed the standard deduction. T or F

True

Mortgage interest and paid home property taxes are both itemized deduction items. T or F

True

Ben and Jack both earned $60,000 this year. Ben (age 30) is married with two children, and Jack (age 68) is single with no dependents. Which of the following is true regarding the amount of Social Security taxes they will pay? a. They will pay the same amount of Social Security taxes. b. Ben will pay less Social Security taxes because he is married. c. Jack will pay less Social Security taxes because he is single. d. Jack will pay less Social Security taxes because he is over age 65. e. Ben will pay less Social Security taxes because he has children.

a. They will pay the same amount of Social Security taxes

You would typically not include ____ in your gross income. a. interest and dividends b. life insurance death benefit payments c. gambling winnings d. pension income e. wages and salaries

b. life insurance death benefit payments

The federal income tax is a. flat rate. b. progressive. c. integrative. d. regressive. e. none of the above.

b. progressive.

The federal government gets the majority of its revenue from the ____ tax. a. property b. sales c. income d. excise e. estate

c. income