Quiz 3

George Franklin paid taxes of $4,200 on a taxable income of $42,000. What was his average tax rate? Select one: a. 10% b. 10.5% c. 15% d. 28% e. 85.5%

The correct answer is: 10%

How long should you generally keep tax records? Select one:a. Until you ale your returns b. 3 years c. 5 years d. 10 years e. 15 year

The correct answer is: 3 years

The tax designed to ensure that those who receive tax breaks also pay their fair share of taxes is called Select one: a. AMT b. Average tax rate c. Income tax rate d. Marginal tax rate e. Total tax rate

The correct answer is: AMT

The correct answer is: Estate taxA federal tax imposed on the value of a person's property at the time of death is called a(n) Select one:a. Estate tax b. Excise taxc. Income taxd. Real estate tax e. Sales tax

The correct answer is: Estate tax

An IRS agent visited Henry's home to verify some information on his tax return. This visit was called a(n) Select one:a. Correspondence audit b. O]ce auditc. Home audit d. Field audite. Detailed audit

The correct answer is: Field audit

Individuals can deduct expenses only in excess of 7.5 percent of adjusted gross income for Select one:a. Contributions to charitable organizations b. Mortgage interestc. Medical and dental expenses d. Miscellaneous expensese. Taxes

The correct answer is: Medical and dental expenses

The tax that is a major source of revenue for local governments is called a(n) Select one:a. Estate tax b. Excise taxc. Income taxd. Real estate tax e. Sales tax

The correct answer is: Real estate tax

If Brenda wants to pay her fair share of taxes, no more and no less, she should practice Select one:a. Tax evasion b. Tax avoidancec. Tax eliminationd. Tax maximization e. Tax acceleration

The correct answer is: Tax avoidance

Income that is taxed at a later date is Select one:a. Adjusted gross income b. Earned incomec. Exclusions from income d. Tax-deferred incomee. Tax-exempt income

The correct answer is: Tax-deferred income

You may be required to make estimated tax payments if: select one:a. You receive a paycheck with taxes withheld b. You do not have interest income c. You are marriedd. You own your own businesse. None of the above are correct

The correct answer is: You own your own business