1. Net Wages and Income Tax Review

2. Jason's household consists of himself, his wife, and their 2-year-old daughter. How much can Jason claim for his exemptions (2015)?
A. $2,000.
B. $6,700.
C. $8,000
D. $11,100.

3. George Franklin paid taxes of $4,375 on a taxable income of $32,000
George Franklin paid taxes of $4,375 on a taxable income of $32,000. What was his average tax rate?
A. 10%
B %
C. 15%
D. 25%

4. If Diane was in a 25% tax bracket and received a $1,000 tax credit, by how much would her taxes be reduced?
A. $250
B. $500
C. $1,000
 D. None of the above
Taxes would be reduced by the full amount of the tax credit: $1,000.

5. Using the following table, calculate the taxes for an individual with 1 allowance and a taxable income of $45,000
A. $7,043.75
B. $6,025.25
C. $7,375.55
D. None of the Above

6. Using the following table, calculate the taxes for an individual with a taxable income of $30,000
D. None of the Above

7. An advantage of investing in a 401(k) plan is the
A. Ability to invest up to 25% of your annual income.
B. Opportunity to lower your taxable income
C. Possibility of receiving an employer match on your contributions.
D. Both B & C

8. Who is ultimately responsible for supplying accurate and complete information for completing a tax return?
A. Professional tax preparer
B. IRS enrolled agent
C. Taxpayer
D. Taxpayer's dependents

9. Nancy is married to Jerry and needs to complete her tax form
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 them?
A. Single
B. Married, filing a joint return
C. Head of household
D. Married, but filing individually

10. At the end of the year, Walter received a form that showed his payments from his bank. That form is called a  A B
C. W-2.
D. W-4.

11. At the end of the year, Walter received a form that showed his payments from independent contracting. That form is called a A B
C. W-2.
D. W-4.

12. At the end of the year, Xavier received a form from his employer that reported annual earnings and the amounts deducted for taxes. That form is called a  A B
C. W-2.
D. W-4.

13. 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 
A. Alternative minimum tax.
B. Earned income credit.
C. Itemized deduction credit.
D. Student deduction.

14. The tax due on the next dollar of income is referred to as the
A. AMT.
B. Average tax rate.
C. Income tax rate.
D. Marginal tax rate.

15. In 2015, taxable income was reduced by ______ for each exemption claimed.

16. When Paul completes his taxes, he can include all of the following as exemptions except
A. His 12-year-old son.
B. His 22-year-old daughter who is a full-time student.
C. His wife.
D. His 20-year-old son who is working full-time and living in an apartment.

17. Fees, tips, and bonuses are forms of
A. Adjusted gross income.
B. Earned income.
C. Exclusions from income.
D. Tax-deferred income.

18. Income that is taxed at a later date is
A. Adjusted gross income.
B. Earned income.
C. Exclusions from income.
D. Tax-deferred income.

19. Income that is never subject to tax is called
A. Adjusted gross income.
B. Earned income.
C. Tax-deferred income.
D. Tax-exempt income.

20. When calculating federal income taxes, what increases “income”?
A. Exclusions
B. Tax-exempt income
C. Tax-deferred income
D. Alimony received

21. Payroll deductions for federal government retirement benefits (such as old age, survivor, and disability insurance) are called
A. Medicare.
B. Income taxes.
C. Social Security taxes.
D. Real estate taxes.

22. This tax is a major financial planning factor for most people because it is sometimes imposed at the federal, state, and local levels.
A. Estate tax
B. Excise tax
C. Income tax
D. Real estate tax

23. The major sections of Form 1040 include all of the following except
A. Filing status and exemptions.
B. Adjustments to income (AGI).
C. Tax credits.
D. All of these are major sections of Form 1040.

24. A worker’s primary goal should be to
A. Pay his or her taxes using estimates for income and deductions.
B. Pay no income taxes.
C. Pay the average tax rate for people working in his or her industry.
D. Pay his or her fair share of taxes while taking advantage of appropriate tax benefits.

25. Income can be earned or unearned
Income can be earned or unearned. Which of the following is an example of unearned income?
A. Money from a part-time second job.
B. Tips from customers.
C. Interest from bank accounts.
D. Paid vacation days from work

26. Read the information below about the profiles of individuals regarding their federal income tax: Mr. Chu – Married with two children, contributes to a retirement plan Mr. Ortiz – Single, age 35, rents an apartment Ms. Lalio – Single, age 58, contributes to a Roth IRA Ms. Feldman – Married, no children, rents a house.
Which person listed above is likely to have the greatest number of payroll tax exemptions which lowers taxable income? A. Mr. Chu. B. Mr. Ortiz. C. Ms. Lalio D. Ms. Feldman

27. The terms “job” and “career” are often used interchangeably
The terms “job” and “career” are often used interchangeably. However, there is a major difference in the meaning of the terms. A career is characterized as
A. responsibilities without risk because it involves different tasks.
B. responsibilities that result in earning income from an hourly wage.
C. a profession or vocation requiring special education or training.
D. work that includes the benefit of short hours or little responsibility

28. Danny's new employer instructed him to come by the office and complete an Employee's Withholding Allowance Certificate. What type of form is this? A B
C. W-2.
D. W-4.

29. Jerry had $100 medical insurance and $200 deductions withheld from his paycheck every two weeks. After deducting $125 in taxes, Jerry's take home pay was $475. The $475 id Jerry's
deductions
net pay
gross pay
hourly wage

30. Sean earns 10% of the selling price of each pair of shoes he sells
Sean earns 10% of the selling price of each pair of shoes he sells. What form of monetary compensation is this?
A. Commission
B. Gratuity
C. Salary
D. Wage

31. Lee Hall is a salesman who receives a $2,000 draw per week
Lee Hall is a salesman who receives a $2,000 draw per week. He receives a 10 percent commission on all sales. Sales for Lee were $310,000. Assuming a 4-week month, Lee's commission after the draw is:
A $31,000
B $23,000
C $13,000
D $32,000

32. Tommy is paid $20. 50 an hour for a regular 40-hour week
Tommy is paid $20.50 an hour for a regular 40-hour week. He earns time and a half if he works overtime. This week Tommy worked his regular 40 hours plus 9 hours of overtime. What is his total pay?
A. $1,098.98
B. $1,076.85
C. $1,096.75
D. $1,096.00

33. What is the Social Security tax rate?
B %
C %
D. 6.2%

34. When company profits were good, Earl and other employees would receive an extra $1000 thank you by the owners. What form of monetary compensation is this?
A Commission
B Wage
C Bonus
D Tips

35. What happens when you claim multiple allowances while filling out your W4?
A. Your taxable income decreases
B. The amount of tax that you have deducted from your paycheck decreases.
C. Nothing happens
D. None of the above.