ISU HDFS 283 QUIZ 3 FALL10

1.
	Assets you own, including such items as stocks, bonds, or real estate, are commonly termed ________. Possible Answers A. capital assets B. monetary assets C. current assets D. intangible assets E. none of these
2.
	The deadline to file your income tax return is ________ although an automatic extension may be filed. Possible Answers A. March 15 B. March 30 C. April 15 D. April 30
3.
	You wish to make a charitable contribution of $2,000 to a qualified organization. You are currently in the 28 percent marginal tax bracket. By how much would this contribution lower your tax bill assuming your other itemized deductions exceed the standard deduction? Possible Answers A. $280.00 B. $560.00 C. $1440.00 D. $2000.000 E. cannot determine from the information provided.
4.
	Which of the following would offset your tax liability in a direct dollar for dollar manner and may actually increase your tax refund beyond the amount paid during the tax year? Possible Answers A. tax exemption B. tax deduction C. tax credit D. tax adjustment E. none of these
5.
	Which of the methods listed below is not used by the IRS as a tax collection mechanism? Possible Answers A. paycheck withholdings B. audits held in your home or office C. quarterly estimated tax payments D. payments sent with your tax return E. all of these are used by the IRS to collect income taxes.
6.
	Tax credits reduce your adjusted gross income dollar-for-dollar. To compute the tax savings multiply the tax credit by the marginal tax rate. Possible Answers A. True B. False
7.
	Income that comes from wages or a business is called ________. Possible Answers A. investment income B. active income C. passive income D. portfolio income E. none of these
8.
	________ income is from activities in which the taxpayer does not actively participate. Possible Answers A. Active B. Portfolio C. Passive D. Investment E. both Passive and Investment
9.
	For most tax payers, their average tax rate is lower than their marginal tax rate. Possible Answers A. True B. False Score:
10.
	In 2005 you purchased a stamp collection for $75 and you sold it in 2008 for $150. Legally, you don't need to pay any taxes on this transaction. Possible Answers A. True B. False
11.
	Deductions calculated using Schedule A which are totaled and subtracted from taxable income are called ________. Possible Answers A. itemized deductions B. standard deductions C. personal expenditures D. personal exemptions E. none of these Score:
12.
	Your dependent is claimed as an approved exemption on ________ tax return. Possible Answers A. your B. his or her own C. the return they choose themselves D. all of these E. none of these Score:
13.
	Three years ago you purchased a share of CompUTech stock for $4, which you could sell today at the current market price of $150. What would be your capital gain on the sale, ignoring commissions? Possible Answers A. $4 B. $146 C. $150 D. $154 E. Cannot determine from the information provided. Score:
14.
	Which of the following is not an income tax filing status? Possible Answers A. single B. married filing jointly and surviving spouses C. heads of household D. married filing separately E. all of these are income tax filing status. Score:
15.
	From the list below choose the item that is not a permissible itemized tax deduction. Possible Answers A. medical and dental expenses B. interest paid on credit cards C. home mortgage interest D. gifts to charity E. casualty and theft losses Score:
16.
	A tax system in which tax rates increase as income increases is called a(n) ________ system. Possible Answers A. progressive tax B. universal tax C. regressive tax D. prorated tax E. none of these Score:
17.
	Huong currently makes $30,000 per year and is in a 20% tax bracket. If he contributes $1,800 to his 401K plan at work, how much will this lower his tax liability? Possible Answers A. $1,800 B. $6,000 C. $360 D. not enough information to determine the answer Score:
18.
	The FICA tax deducted from your salary goes to pay for unemployment insurance and payroll deductions. Possible Answers A. True B. False Score:
19.
	From the list below choose the item that is not a permissible tax deduction. Possible Answers A. state, local, and real estate taxes B. home equity loan interest on debt up to $100,000 C. auto, truck, or van loan interest D. interest on money borrowed to invest, within the IRS limits based on investment income E. unreimbursed job-related expenses and tax preparation costs within the IRS limits Score:
20.
	Dang Nguyen currently makes $30,000 per year and in a 25% tax bracket. If he contributes $2,400 to his 401K plan at work, how much will this lower his taxable income? Possible Answers A. $7,500 B. $600 C. $2,400 D. not enough