1. The “ability to ___ principle” is an accepted principle of tax fairness. Pay

2. _____ collected are used to provide education and public services. Taxes

3. You must use Form ____ if your taxable income exceeds $100,000. 1040A

4. In a graduated tax system, tax rates ______ as income increases. Increase

5. A person who lives with you and receives support from you is called a/an _________. Dependent

6. You must ____ a tax return to receive a refund of taxes withheld unnecessarily. File

7. To itemize deductions, you must use the Long Form ______. 1040 (Schedule A)

8. Each ________ claimed by a taxpayer reduces total tax liability. Exemption

9. Taxpayers should not itemize unless their deductions exceed the ______ deduction. Standard

10. Taxes based on the ability to pay is called __________. Progressive

11. ______ taxes are based on a flat rate that does not change according to income level. Proportional

12. You can not itemize deductions on Form _____. 1040 EZ

13. Use of a tax ______ does not absolve one from an error on your tax return. Preparer

14. The sole function of the _____ is to collect income taxes and to enforce tax laws. Internal Revenue Service (IRS)

15. The power to levy taxes rests with ______. Congress

16. Worker’s compensation and unemployment compensation are _______. Taxable

17. Which of the following is not a taxable income: Wages, Tips, Salaries, Alimony, Child Support Child Support

18. By designating $3 to the Presidential Election Campaign Fund, you do not increase your ______. Liability

19. In the U.S., responsibility for paying income taxes rests with the ________. Individual

20. Tax ____ is a serious crime punishable by a fine or imprisonment or both. Evasion

21. If you have many deductions, it’s a good idea to ______ instead of taking the standard deduction. Itemize

22. The largest source of government income in the U.S. is _______ Income Taxes

23. Which of the following people must sign a tax return? The Tax Payer The Tax Payer’s Spouse The Person Who Prepared the Return All of them

24. The income tax is an example of which type of tax: Progressive Proportional Regressive Excise Progressive

25. Sales tax is an example of which type of tax? Progressive Proportional Regressive Excise Regressive

26. Property tax is an example of which type of tax? Progressive Proportional Regressive Excise Proportional

27. As taxable income increase, income tax rates _____. Decrease

28. The first income tax became necessary during what war? War of 1812

29. You must file your income tax returns no later than _____. April 15

30. An examination of tax returns by the IRS is called an ______. Audit

31. Definitions:

32. A person who can be claimed as an exemption by a tax payer. Dependent

33. A type of income that must be claimed on a Form 1040. Alimony

34. Taxes that increase in proportion to income Progressive

35. A type of income received that is not taxable. Child Support

36. Taxes for which the rate remains constant, regardless of the amount of income Proportional

37. Money collected by the government through taxes. Revenue

38. The type of tax that requires those who can least afford it to pay the most in proportion to their income. Regressive

39. Willful failure to file and pay taxes. Tax Evasion

40. An amount you may subtract from your income for each person who depends on your income to live. Exemption

41. A person who can be claimed as an exemption by a taxpayer Dependent

42. Income ranges where the more you make the higher the tax rate you pay Tax Brackets

43. To list allowable expenses on your tax returns. Itemize

44. Good Luck on Your Test!