Personal Finance Chapter 3

The ______ income is the gross income less than tax deductions and payments for insurance and retirement savings. Take-home
Your income tax withholding is dependent on: Your income level and number of withholding allowances.
Your take-home pay is what you are left with after subtracting withholdings from your: Gross earnings.
Molly and Jason were married. Their only dependent was Spot, their black standard poodle. Jason died in 2013. Assuming Molly does not remarry, in 2014 the only legal filing status for Molly will be: Single.
The federal government gets the majority of its revenue from ______ tax. Income
Henry is married to Lillian, and they have two dependent children. Henry and Lillian want to file separate returns. Which of the following filing statuses can Henry and Lillian use in their tax returns? Married filing separately
The federal income tax is: Progressive.
Ben and Jack earned $60,000 this year. Ben (age 30) is married with two children, and Jack (age 68) is single with no dependents. Which of the following is true regarding the amount of Social Security taxes they will pay? They will pay the same amount of Social Security taxes.
Mr. and Mrs. Davenport of age 40 and 38 respectively, have three children aged 3, 6, and 13. Their financial matters for 2014 are as follows:Adjusted Gross Income (AGI) – $65,000Unreimbursed Medical Expenses – $6,750How much would the Davenports’ medical expenses contribute to their total itemized deductions? $250
A capital gain is the result of: Selling an asset for more than its purchase price.
Molly and Justin are considering contributing $5,000 to their favorite, tax deductible charity. This contribution will bring their total itemized deductions $20,000. Assuming they are in the 28% marginal tax bracket, how much will they save in taxes by contributing this $1,000 to their church? $1,400
John and Charlotte are considering contributing $1,000 to their church. This contribution will bring their total itemized deductions for $2,000. Assuming they are in the 15% marginal tax bracket, how much will they save in taxes by contributing this $1,000 to their church? $0
______ would be considered a part of your taxable income. A gain from the sale of assets
You purchased and lived in your home for 8 years. Now, you have received an excellent promotion. But, you will have to sell your home and move to another community. The capital gains on the home sold will: Be taxable exempt for the first $250,000 of the gain.
Which of the following is subject to federal income tax? Alimony received.
If you do not wish to itemize deductions, you can use the: Standard deduction.
Murray (age 68, single) just sold his home of 35 years so that he could relocate nearer his grandchildren. He realized a $400,000 capital gain on his home. How much gain will Murray have to pay taxes on? $150,000
You would typically include _____ in your gross income. Income from pensions
For those under the age of 65, medical and dental expenses may be included as itemized deductions: Only for amounts in excess of 10% of the adjusted gross income.

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