Multiple Choice
Work Problems 1
Work Problems 2
Work Problems 3
Fill in the Blank
100
Which of the following is an example of a job benefit?
a. paid holidays b. recreational facilities c. child care
d. All of the above.
d. All of the above.
100
The Madisons must complete their joint federal income tax return for last year's income. Their gross income last year was $44,150. They had adjustments to income for an approved retirement plan of $2,870. They also itemized their deductions and found a total of $8,380. They claimed three exemptions (one each for Twanya, Lewellyn, and their son) at $3,100 each. What is their taxable income
$23,600
100
The Madisons' son, Dwayne, earned $2,130 last summer to help with the cost of his schooling. He also earned $84 in interest through his savings account. All the Madisons paid FICA taxes at 7.65% on their gross wages. How much FICA taxes did Dwayne pay?
$162.95
$2,130 x 0.0765 = $162.945 = $162.95
100
The Madisons' son, Dwayne, earned $2,130 last summer to help with the cost of his schooling. He also earned $84 in interest through his savings account. His employer deducted $256 in federal and $78 in state withholding taxes. Dwayne needs to complete state and federal income tax returns in order to get refunds of the taxes that were withheld from his wages.
Dwayne is single and is claimed as a dependent by his parents.
Using the table on page 55 of the textbook, find the amount of Dwayne's federal income tax. He claims the standard deduction, which is a minimum of $800 and a maximum of $4,850.
$0 federal income tax
allowable deduction =$250 + $2,130 = $2380
Adjusted gross income = $2, 130 + $84 = $2214
$2380 > $$2214; 0 taxable income; 0 federal income tax
100
The amount of money deducted from worker's pay for federal income tax is called a(n) ______________ tax
withholding
200
n a graduated tax system,
a. the tax rate stays the same regardless of taxable income.
b. the tax rate gets lower as taxable income gets larger.
c. the tax rate gets higher as taxable income gets smaller.
d. the tax rate gets higher as taxable income gets larger.
d. the tax rate gets higher as taxable income gets larger.
200
Using the table on page 55 in the textbook, what is the amount of their federal income tax for a married couple filing jointly with taxable income of 23, 600?
$2,829
200
The Madison's paid $2,120 federal income tax, $704 state income tax, and $3,377.475 FICA tax. What total amount of state income, federal income, and FICA taxes did the parents pay?
$6,910.48
$2,829 + $704 + $3,377.48 = $6,910.48 total taxes paid
200
Dwayne's employer deducted $256 in federal withholding. He owes $0 in federal income taxes. How much federal income tax refund should Dwayne expect.
$256
$256 - 0 = $256 refund
200
After all deductions are subtracted from
total wages, the remaining amount is called
net pay
300
3. Which of the following describes how to calculate an employee's net job benefits?
a. Add the gross pay and the employee benefits.
b. Add the gross pay and the employee benefits and subtract the job expenses.
c. Subtract the job expenses from the employee benefits.
d. Subtract the employee benefits from gross pay.
b. Add the gross pay and the employee benefits and subtract the job expenses.
300
The Madisons owed $2,829 on taxes. Their employer deducted $2,704 in federal withholding taxes during the year. Will the Madisons have to pay more taxes or will they receive a refund, and what is the amount?
$125 owed
$2,829 - $2,704 = $125 owed
300
Dwayne Madison paid $0 federal income tax, $0 state income tax, and $162.95 FICA tax. What total amount of state income, federal income, and FICA taxes did Dwayne pay?
$162.95
$0 + $0 + $162.95 = $162.95
300
If Dwayne has $0 taxable income and owes $0 in federal taxable income. According to the table on page 61 of the text, how much state tax does Dwayne owe?
$0 state income tax
300
When the tax rate does not change with respect to the amount of income, it is a(n) __________ tax.
flat
400
4. What is the primary reason for writing a budget?
a. to calculate net income
b. to calculate taxable income
c. to study past spending habits
d. to help allocate (to divide and give out (something) for a special reason or to particular people) future income
d. to help allocate (to divide and give out (something) for a special reason or to particular people) future income
400
The Madisons must complete a state income tax return and pay a tax on the amount of taxable income shown on their federal return. Their federal taxable income $23,600
4. Using the table on page 61 in the textbook, what is the amount of their state income tax?
$704
$23,600 -$16,000 = $7,600 x .04 = $304 + $400 = $704 state income tax
400
The Madisons want to budget their income. They estimate that their net income this year will be $39,000. They plan to spend 25% of their income on food. How much do they plan to spend on food?
$9,750
$39,000 x .25 = $9,750
400
Dwayne's employer withheld $78 in state income tax withholding. Dwayne owes $0 state tax. What will be his refund?
$0
400
If too much withholding tax has been paid, the government pays it back in the form of a __________
refund
500
Which report must taxpayers file each year to determine if they have paid enough taxes?
a. federal income tax report
b. federal income tax statement
c. federal income tax document
d. federal income tax return
d. federal income tax return
500
The Madisons owe $704 in state income tax. The Madisons' employer deducted $706 in state withholding taxes during the year. Will they have to pay more state income taxes or will they receive a refund, and what is the amount?
$2 refund
$706 - $704 = $2 refund
500
5The Madisons want to budget their income. They estimate that their net income this year will be $39,000. They plan to spend 10% of their income on clothing. How much do they plan to spend on clothing?
$3,900
$39,000 x .10 = $3,900
500
Twanya and Lewellyn Madison are married and have one son (Dwayne). Twanya works part-time and Lewellyn works full-time as salesclerks in the same department store. The Madisons must complete their joint federal income tax return for last year's income. Their gross income last year was $44,150.
All the Madisons paid FICA taxes at 7.65% on their gross wages.
How much FICA taxes did the parents pay?
$3,377.48
$44,150 x 0.0765 = $3,377.475 or $3,377.48 FICA taxes paid.
500
A(n) ____________ is an amount of money subtracted from gross pay.
deduction