Personal Finance Ch.4

A general sales tax is also referred to as an excise tax False
Taxable income refers to the amount deduction from a person’s pay False
A tax deduction directly reduces the amount of taxes owed False
Most people mail the full amount owed in federal income tax each April False
Enrolled agents are IRS auditors who visit people’s homes to verify deductions True
________ is deductible as an itemized deduciton Mortgage interest
An example of an adjustment in income is IRS contributions
An exemption refers to a reduction from adjusted gross income
When an IRS agent visits your home or office field audit
An example of tax-exempt income is interest from municipal bonds
How much of every dollar goes to taxes 1/3 or 30%
Four types of taxes 1) Taxes on purchases 2) Taxes on property3) Taxes on wealth4) Taxes on earning
What does the AGI stand for Adjusted Gross Income
What is tax- deferred income income that will be taxed at a later date
What are 5 filing status categories 1) Single2) Married3) Widow4) Household5) Married, singled filed
What are the 4 types of tax forms and what makes each unique A. 1040 EZB. 1040/1040 AC. 1040 XD. 1040 NR/ 1040-EZ
What is the difference between a tax credit and a tax deduction Tax deductions subtracts from adjusted gross
Which is a better (tax credit or tax deduction) Tax credit

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