Finances Ch. 3

1040X Peter filed his federal income taxes, but he needs to make a correction to his income. Which form should he use?
$4,050 In 2017, taxable income was reduced by__________for each exemption claimed.
earned income Fees, tips, and bonuses are an example of
tax-exempt income income that is not subject to tax is called
$14,000 the maximum amount that an individual can give another in a year without being subject to estate taxes is
marginal tax rate the rate used to calculate the tax due on the next dollar of income is referred to as the
6 years Fred has been completing his own tax returns for years. The IRS has recently contacted him withquestions about some of his prior returns. How many years back is he responsible for providingdocumentation?
social security taxes taxes on earnings that fund old age survivor and disability insurance benefits are called
1099 At the end of the year, Walter received a form that showed his payments from independent contracting. That form is called _____
domestic tax credit Which of the following is NOT a tax credit?
charity contributions adjustments to income include all of the following except
estate tax A tax imposed on the value of a person’s property at the time of death is called a(n)
passive income Gross (or total) income includes
W-2 At the end of the year, Xavier received a form from his employer that reports annual earnings and the amounts deducted for taxes. That form is called a _____
His 20 year old son who is working full-time and living in an apartment When Paul completes his taxes, he can include all of the following as exemptions except
10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. in 2017 the U.S. federal tax tables included tax rates of
tax-deffered income income that is taxed at a later date is
W-2 At the end of the year, employees receive a ____ form that reports annual earnings and the amounts deducted for taxes from their employer.
1040Z Which of the following is NOT a valid form for filing federal income taxes?
income tax This tax is a major financial planning factor for most people because it is sometimes imposed at thefederal, state, and local levels.
Earned-income credit Tanya is a single low-income working parent and Fred is a single high-income working parent. Because of her status, Tanya, but not Fred, may be eligible for the
Alimony When calculating federal income taxes, what increases “gross income”?
Married, filing joint return Nancy is married to Jerry and needs to complete her tax form. They both earn about the same amount of money each year. What filing status would be best for Nancy?
earned income credit When calculating federal income taxes, “gross income” includes all of the following categories except
you are an independent contractor You may be required to make estimated tax payments if
real estate property tax What are the main sources of revenue for local governments?
Subtract his itemized deductions. Joseph needs to complete his income taxes for the year. He has already calculated his adjusted grossincome. What does he need to do next?
1099 At the end of the year, Yvonne received a form from her bank that reported income from her savings.That form is called a
AMT tax credit Recent tax credits include all of the following except the
AMT The tax designed to ensure that those who receive tax breaks also pay their fair share of taxes is called
Excise tax A tax due on the purchase of gasoline is called a(n)
Miscellaneous expenses less than 2% of AGI Athena wants to determine if she should itemize her deductions. She has identified several possible deductions. Which of the following is NOT a proper deduction?
Adjusted gross income Gross income minuss Adjustments to Income equals
inheritance tax The amount levied on the value of property bequeathed by a deceased person
Average tax rate The tax based on the total tax due divided by taxable income is called the
4868 Penny knows that she needs to file her taxes, but is unable to do so by April 15. What form does she need to complete to obtain an automatic six-month extension?
6 years How long should you keep tax documentation from the date you file your return?
Miscellaneous expenses in excess of 2% of AGI Shannon is working on her federal income tax form and wants to determine if she should itemize her deductions. She has identified several possible deductions. Which of the following is an acceptable deduction?
medical and dental expenses Taxpayers over 65 can only deduct expenses that are greater than 7.5% of adjusted gross income for
Qualifying widow or widower Bob was married to Sandy and they have a 12 year old son. Sandy passed away last year. Bob needs to complete his federal income taxes for the year. What filing status could he use because of his marital status?
$10,250 Janet is completing her federal income taxes for the year and has identified the amounts listed here. Howmuch can she rightfully deduct?
$10,690 Using the following table, calculate the taxes for an individual with taxable income of $62,000
$2413.00 an itemized deduction of $6350 with a 38 percent tax rate would reduce a person’s taxes by
$230 a tax credit of $230 for a person in a 28 percent tax bracket would reduce a person’s taxes by:
owe $3050 A person with a total tax liability of $8,850 and withholding of federal taxes of $5,800 would:
$350 Michel Barbour is considering an additional charitable contribution of $1250 to a tax deductible charity, bringing her total itemized deductions to $12,000. If Michelle is in a 28 percent tax bracket, how much will this $1,2500 contribution reduce her taxes?
$46,030 George Washburn has earnings from his salary of $46,200, interest on savings of $1005, a deductible contribution to an IRA on $1,850, and dividends from mutual funds of $675. George’s adjusted income would be
$3,130 Using the following table, calculate the taxes for an individual with taxable income of $23,8008800-3600=15%
$475 If Jack was in a 25% tax bracket and received a $1,900 tax deduction, by how much would his taxes be reduced?
$16,400 Sam and Diane are completing their federal income taxes for the year and have identified the amounts listed here. How much can they rightfully deduct?AGI: 82,000medical and dental: 9200state income taxes: 3700mortgage interest: 10,300charitable contributions: 1400
A person with a total tax liability of $8,850 and withholding of federal taxes of $5,800 would:

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