Tax Fundamentals Quiz Chapter 12

1. The total amount of taxes you owe is called _______________. a)tax liability b)income tax c)exclusion d)exemption

1. The total amount of taxes you owe is called _______________. a)tax liability b)income tax c)exclusion d)exemption

2. A federal tax collected in the value of a person’s property at the time of his or her death is called a(n)__________. a)tax liability b)inheritance tax c)estate tax d)income tax

2. A federal tax collected in the value of a person’s property at the time of his or her death is called a(n)__________. a)tax liability b)inheritance tax c)estate tax d)income tax

3. ____________ is the tax in wages, salaries, and self-employed earnings. a)Estate tax b)Exclusionary tax c)Standard deduction d)Income tax

3. ____________ is the tax in wages, salaries, and self-employed earnings. a)Estate tax b)Exclusionary tax c)Standard deduction d)Income tax

4. _________ is a form, such as a 1040 or 1040 EZ, on which a taxpayer reports how much money was earned from working and other sources and the exact taxes that are owed. a)tax liability b)income tax return c)exclusion d)exemption.

4. _________ is a form, such as a 1040 or 1040 EZ, on which a taxpayer reports how much money was earned from working and other sources and the exact taxes that are owed. a)tax liability b)income tax return c)exclusion d)exemption.

5. Your ________ is your adjusted gross income less any allowable tax deductions and exemptions. a)tax liability b)taxable income c)deductions d)exemptions

5. Your ________ is your adjusted gross income less any allowable tax deductions and exemptions. a)tax liability b)taxable income c)deductions d)exemptions

MINUS OR (choose the deduction that is higher)

6. A(n) _______ is a specific expense, such as a medical expense, that you deduct from your adjusted gross income. a)itemized deduction b)standard deduction c)exclusion d)exemption

6. A(n) _______ is a specific expense, such as a medical expense, that you deduct from your adjusted gross income. a)itemized deduction b)standard deduction c)exclusion d)exemption

7. A(n) ________ is an expense that you can subtract from your adjusted gross income to figure out your taxable income. a)estate tax b)tax deduction c)liability d)tax return

7. A(n) ________ is an expense that you can subtract from your adjusted gross income to figure out your taxable income. a)estate tax b)tax deduction c)liability d)tax return

8. ________ is a state tax collected on the property left by a person to his or her heir in a will. a)Estate tax b)Income tax c)Tax liability d)Inheritance tax

8. ________ is a state tax collected on the property left by a person to his or her heir in a will. a)Estate tax b)Income tax c)Tax liability d)Inheritance tax

9.______ is also called tax- exempt income (income that is not taxed). a)Earned income b)Interest income c)Dividend income d)Exclusions

9.______ is also called tax- exempt income (income that is not taxed). a)Earned income b)Interest income c)Dividend income d)Exclusions

10. _____ is your gross income after calculating certain deductions. a)Tax liability b)Income tax c)Exclusion d)Adjusted gross income

10. _____ is your gross income after calculating certain deductions. a)Tax liability b)Income tax c)Exclusion d)Adjusted gross income

Gross income MINUS income that is excluded (exclusions) Any adjustments/ deductions MINUS

11. Every taxpayer receives the ________, which is an amount of money set by the IRS that is not taxed. a)standard deduction b)income tax c)itemized deduction d)earned income

11. Every taxpayer receives the ________, which is an amount of money set by the IRS that is not taxed. a)standard deduction b)income tax c)itemized deduction d)earned income

12. A(n) ______ is a deduction from adjusted gross income for the taxpayer, spouse, and qualified dependents (someone you support financially). a)tax liability b)income tax c)exemption d)withdrawal

12. A(n) ______ is a deduction from adjusted gross income for the taxpayer, spouse, and qualified dependents (someone you support financially). a)tax liability b)income tax c)exemption d)withdrawal

13. Your income tax may be reduced by a ______, which is an amount of money that can be subtracted directly from the taxes you owe (dollar for dollar). a)liability b)estate tax c)tax credit d)bill

13. Your income tax may be reduced by a ______, which is an amount of money that can be subtracted directly from the taxes you owe (dollar for dollar). a)liability b)estate tax c)tax credit d)bill

14. A(n) _____ is an adjustment to the tax withheld from your paycheck, based on your marital status and whether you have dependents. In other words, the amount of income tax withheld from your paycheck depends on how many of these you claim on your W-4 form. a)tax return b)allowance c)1040EZ d)account number

14. A(n) _____ is an adjustment to the tax withheld from your paycheck, based on your marital status and whether you have dependents. In other words, the amount of income tax withheld from your paycheck depends on how many of these you claim on your W-4 form. a)tax return b)allowance c)1040EZ d)account number