Chapter 4
anita sold her home for $60,000 but purchased it originally for $20,000. she then purchased another home a month later for $70,000. the taxable amount of her capital gain is
$0
alicia has a tax credit of $100 and a marginal tax rate of 28%,. her income tax will be reduced by how much
$100
suppose your taxable income is over $66,000 but less than $137,000 nd your taxes are equal to $15,000 plus 30% of any amount over $66,000. if your income is $80,000 what is your tax payment
$19,200
which item below is an example of tax-advantaged income
$200 of municipal bond interest
alicia has an additional itemized deduction of $100 and a marginal tax rate of 28%. her income tax will be reduced by how much
$28
maria had capital losses last year of $10,000. she will be able to deduct how much form her other taxable income in that year?
$3,000
anita sold her home for $60,000 but purchased it originally for $20,000. she then purchased another home a month later for $70,000. her capital gain on the sale of the first home was
$40,000
at the end of the year your employer will provide you wth a statement indicating your total wages for the year. this form is called a
W-2
the form on which an employer lists annual taxes withheld is a
W-2 form
an inheritance tax is a type of
death tax
which of the following does NOT represent a filing status
dependant
a refund anticipation loan is associated with
electronic filing
an increase in which of the following would NOT decrease your taxable income
federal taxes withheld form wages
which of the following statements is false?
if you are listed as a dependent on your parent's return, you need NOT file an individual return yourself
Global income consists of
income from all sources
the Hope Scholarship Credit
is available for the first two years of post secondary education
the dollar value of the personal exemptions
is positively related to the number of dependents
taxpayers should claim itemized deductions only if
itemized deductions exceed the standard deduction
the standard deduction is the largest for
married couples filing jointly
if the parents claim a child as an exemption on their tax return, the child on his or her tax return
may not claim an additional exemption
the medical expense deduction may only be taken if they were
more than 7.5% of adjusted gross income
which item is a nontaxable exclusion from gross income
municipal bond interest
which of the following is NOT used to defer income
municipal bonds
matt had a $4,000 gain from the sale of his car he
must report the gain as a capital gain
FICA taxes include two components. these are
old-age disability and health insurance
the standard deduction for married couples filing jointly is
twice that of single filers
you ca receive an automatic four month extension for filing your federal tax return
under most circumstances
if your employer is withholding an excessive amount for federal taxes
you can refile a W-4 to have the withholding reduced
personal exemptions are deducted from
adjusted gross income
which is NOT a type of IRS audit
administrative audit
gross income consists of
all income subject to the federal income taxes
under the current tax law
all individuals must choose between a standard deduction or itemizing personal deductions
the federal government has
an estate tax and a gift tax but no inheritance tax
for individual with income below specified limits a contribution to a traditional IRA is taken as
and adjustment (deduction) to gross income
when taxable income exceeds certain levels, exemption and deduction allowances
are eliminated
which item below is not taken as an itemized deduction
child and dependent care expenses
which of the following could NOT be taken as an itemized deduction?
commuting expenses
which of the following would not be a good reason for itemizing deductions rather than take the standard deductions
considerable IRA contributions
taxable income = adjusted gross income minus
personal dependency exemptions and personal deductions
property taxes are
primarily imposed by local and city governments
which one of the following housing related expenditures is not an itemized deduction
property taxes, mortgage interest payments, the capital gain on sale of a home (all of the above)
which of the following is an adjustment to gross income
qualified educational expenses
with a traditional IRA and earned income below federally determined limits, the annual contributions
reduce your taxable income. the funds in the IRA and its return are not taxed until these funds are disbursed in your retirement years
which one of the following is not an itemized deduction
rental payments
individuals with above average amounts of mortgage interest, medical expenses and property taxes are most likely to
take only itemized deductions
the statute of limitations means that
the IRS has three years to impose additional tax liabilities
if you can not meet the deadline for your return
the IRS will grant you an automatic extension if you file for it. however, you will be penalized if you have not paid your taxes by the file deadline
which statement is NOT true of state and local taxes
they do not vary much from one part of the country to another
which statement is NOT true of Social Security taxes
they have a progressive rate structure similar to that of the personal income tax
the purpose of the alternative minimum tax is
to ensure that households exceeding certain income limits pay at least some tax
