Review
Which type of tax are Social Security tax and Medicare tax considered to be? A. Income B. Inheritance C. Excise D. Real Estate Property
A. Income
What historical event partially inspired the United States Government to begin collecting individual taxes? A. the signing of the Declaration of Independence B. World War I C. World War II D. the abashment of slavery
B. World War I
Huda wants to buy a soda. A 12-pack cost $9.50 She knows with the local sales tax of $2.00, the total should be $11.50. When she gets to the check out the total is now $13.00. Which type of tax is Huda MOST likely paying that would explain the extra $1.50? A. estate B. excise C. Inheritance D. Income
B. excise
Tanya has money she wants to leave to her grandchildren after she dies but she doesn't want them to pay an inheritance tax. What is the BEST way for Tanya to leave money to her grandchildren tax-free? A.put all her money into a 401k B.start gifting each of them $15,000 per year now C.put all her money into stocks and bonds D.start gifting each of them $25,000 per year now
B.start gifting each of them $15,000 per year now
In the United States only five states currently charge sales tax on purchases. True or False
False
Jane is not married and has no children. She is 35 and owns her own home. Under which status is she most likely to file? A. filing jointly B. single C. head of household D. widow
B. single
Shawn goes to the library to pick up a copy of a common tax form used to file taxes. Which of the following MOST likely is the form that Shawn got? A.1099 B.W-2 C.1776 D. 1040
D. 1040
Trevor bought a new pair of jeans and the price was listed as $50. When he paid for the jeans the price was $53.50. The extra $3.50 was for tax. Which type of tax was Trevor MOST likely paying? A. sales B. estate C. inheritance D. income
A. sales
Jorge has been audited by the IRS. He is hoping that the process will be very simple. Which type of audit would Jorge MOST likely find to be the easiest to deal with? A. deduction audit B. correspondence audit C. office audit D. field audit
B. correspondence audit
This year teachers can earn $250 tax credit on money they spend in their classrooms. How will this tax credit affect the teacher's tax return? A.$250 will come directly off the amount of taxes the teachers owe B. $250 will be subtracted from the teachers gross income C. the credit will put them in a higher tax bracket D. the credit is not big enough to make any impact on the teachers taxes
A.$250 will come directly off the amount of taxes the teachers owe
John has a gross income of $60,000. He is single and choosing to take a deduction for all single people in the amount of $6,300. What does this $6,300 represent? A. standard deduction B. an itemized deduction C. an earned income credit D. an adjusted gross income
A. standard deduction
In the United States which day are federal taxes due? A. February 28th B. December 13th C. July 4th D. April 15th
D. April 15th
D. married, filing separately
In which year did the United States begin collecting federal income tax? A. 1776 B. 1861 C. 1913 D. 1955
C. 1913
Daniel and Melissa just bought a new house for $200,000. Each quarter, they now have to pay $4,000 in taxes. Which type of tax are they paying because of their purchase? A. estate B. inheritance C. real estate property D. income
C. real estate property