ACE 240 Quiz 4
Molly and Justin are considering contributing $5,000 to their favorite, tax deductible charity. This contribution will bring their total itemized deductions to $20,000. Assuming they are in the 28% marginal tax bracket, how much will they save in taxes by contributing this $5,000 to charity?
$1,400 (5,000*0.28)
Tax practitioners that are Federally licensed are called
Enrolled Agents
A tax audit is a(n)
IRS attempt to verify the accuracy of a return
Henry is married to Lillian, and they have two dependent children. Henry can legally file using which of the following filing statuses?
Married filing jointly
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?
They will pay the same amount of Social Security taxes.
For tax purposes, head-of-household refers to
a single individual with dependents
The tax rate on capital gains for most people is
dependent on the time the asset was owned
Your take-home pay is what you are left with after subtracting withholdings from your
gross earnings.
The total amount that you owe for income tax in one year is your tax
liability.
You would typically not include ____ in your gross income.
life insurance death benefit payments
The federal income tax is
progressive
Local governments get most of their tax revenue from
property taxes.
Typically state governments get most of their tax revenue from
sales taxes and income taxes.
A ____ would be most likely to have to pay estimated taxes.
self-employed plumber
A capital gain is the result of
selling an asset for more than purchase price
If you do not wish to itemize deductions, you can use the
standard deduction.
Tax credits reduce your
tax liability
Your average tax rate is your
tax liability divided by taxable income
____ income is subject to federal taxes.
taxable
Connie is a 20-year-old college student who earned $8,000 and spent it all on her support during the year. Her parents may claim her as a tax dependent as long as
they contribute more than half her support for the year.
