Question 1

Thomas Franklin claimed an additional $3,000 in deductions he knowingly knew he did not qualify for so he could reduce his tax bill.This is referred to as tax:

Accepted Answer

A)  avoidance.
B)  acceleration.
C)  evasion.
D)  delaying.
E)  deferment.F) C) and E)
G) A) and B)

Question 2

Kelly Vernon wants her tax return prepared by a government approved tax expert.Which of the following tax preparers should Kelly use?

Accepted Answer

A)  CPA
B)  Enrolled agent
C)  Nationally-certified tax preparer
D)  Tax attorney
E)  Local tax preparerF) A) and D)
G) B) and D)

Question 3

How is taxable income computed?

Accepted Answer

Taxable income is a result of ...

Question 4

Which type of tax is imposed on specific goods and services,such as gasoline,at the time of purchase?

Accepted Answer

A)  Estate
B)  Inheritance
C)  Excise
D)  General sales
E)  Value-addedF) D) and E)
G) A) and C)

Question 5

Tim Bridges owns a bass fishing boat.His state imposes an annual 3.25 percent tax on the current value of this boat.What type of tax is this most likely to be?

Accepted Answer

A)  General sales tax
B)  Excise tax
C)  Personal property tax
D)  Income tax
E)  Estate taxF) D) and E)
G) A) and B)

Question 6

Tax evasion is the use of illegal actions to reduce one's taxes.

Accepted Answer

A) True 
 B)False

Question 7

An expense that would be included in the itemized deductions of a taxpayer is:

Accepted Answer

A)  personal postage expenses.
B)  life insurance premiums.
C)  real estate property taxes.
D)  retirement plan contributions.
E)  annual interest paid on credit cards.F) B) and D)
G) A) and B)

Question 8

Michael closed on his new home December 31,2016 instead of January 1,2017.As a result,Michael:

Accepted Answer

A)  accelerated tax deductions in 2016.
B)  accelerated tax deductions in 2017.
C)  increased his adjusted gross income in 2016.
D)  decreased his adjusted gross income in 2017.
E)  decreased tax exemptions in 2016.F) A) and B)
G) A) and C)

Question 9

Which of the following is a major source of revenue for local governments?

Accepted Answer

A)  Real estate property tax
B)  Excise tax
C)  Estate tax
D)  Inheritance tax
E)  Social Security taxF) A) and B)
G) A) and C) A

Question 10

Which one of the following people is least likely to have to file a federal income tax return?

Accepted Answer

A)  A U.S.citizen who is a resident of Puerto Rico.
B)  A U.S.citizen earning $8,000 where taxes were withheld.
C)  A single person earning less than $10,000.
D)  A single person over age 65 earning $15,000.
E)  A 28-year old single college student earning more than $11,000.F) A) and B)
G) B) and C)

Question 11

A deduction from adjusted gross income for yourself,your spouse,and qualified dependents is:

Accepted Answer

A)  the standard deduction.
B)  a tax credit.
C)  an itemized deduction.
D)  an exclusion.
E)  an exemption.F) C) and E)
G) C) and D)

Question 12

A person with a total tax liability of $4,350 and withholding of federal taxes of $3,975 would:

Accepted Answer

A)  receive a refund of $3,975.
B)  owe $4,350.
C)  owe $375.
D)  receive a refund of $4,350.
E)  receive a refund of $375.F) D) and E)
G) A) and D)

Question 13

The state of Oklahoma imposes a tax of $.17 per gallon on gasoline.What type of tax is this most likely to be?

Accepted Answer

A)  General sales tax
B)  Excise tax
C)  Personal property tax
D)  Income tax
E)  Estate taxF) C) and D)
G) A) and B) B

Question 14

Most people pay federal income tax by:

Accepted Answer

A)  paying the total amount owed on April 15.
B)  filing quarterly tax returns.
C)  having amounts deducted from his/her pay.
D)  earning tax credits for various deductions.
E)  filing the 1040 EZ form.F) B) and D)
G) D) and E)

Question 15

Joan Sanchez is single and earns $40,000 in taxable income.She uses the following tax rate schedule to calculate the taxes she owes.
 What is Joan's marginal tax rate?

Accepted Answer

A)  10%
B)  15%
C)  25%
D)  28%
E)  between 10% and 15%F) D) and E)
G) A) and D)

Question 16

When planning to use a tax preparation service,what factors should be considered?

Accepted Answer

The follow...

Question 17

The ______________ property tax is based on the value of land and buildings at some point in time.

Accepted Answer

A)  personal
B)  real estate
C)  direct
D)  proportional
E)  regressiveF) A) and D)
G) B) and E)

Question 18

Most people pay the following taxes:

Accepted Answer

A)  taxes on purchases.
B)  taxes on property.
C)  taxes on wealth.
D)  taxes on earnings.
E)  All of theseF) C) and D)
G) A) and C) E

Question 19

Cameron Nelson wants to complete his own federal income tax return.He has several questions about the tax form to use and what items should be reported as income.What sources of assistance would you recommend for Cameron?

Accepted Answer

The IRS offers taxpayer assistance in se...

Question 20

Which one of the following states does not have a general sales tax?

Accepted Answer

A)  Virginia
B)  Maryland
C)  Texas
D)  Alaska
E)  MichiganF) A) and D)
G) B) and C)

Exam 4: Planning Your Tax Strategy

Thomas Franklin claimed an additional $3,000 in deductions he knowingly knew he did not qualify for so he could reduce his tax bill.This is referred to as tax:

Correct AnswerverifiedShow Answer

Kelly Vernon wants her tax return prepared by a government approved tax expert.Which of the following tax preparers should Kelly use?

Correct AnswerverifiedShow Answer

How is taxable income computed?

Correct AnswerverifiedTaxable income is a result of ...View AnswerShow Answer

Which type of tax is imposed on specific goods and services,such as gasoline,at the time of purchase?

Correct AnswerverifiedShow Answer

Tim Bridges owns a bass fishing boat.His state imposes an annual 3.25 percent tax on the current value of this boat.What type of tax is this most likely to be?

Correct AnswerverifiedShow Answer

Tax evasion is the use of illegal actions to reduce one's taxes.

Correct AnswerverifiedShow Answer

An expense that would be included in the itemized deductions of a taxpayer is:

Correct AnswerverifiedShow Answer

Michael closed on his new home December 31,2016 instead of January 1,2017.As a result,Michael:

Correct AnswerverifiedShow Answer

Which of the following is a major source of revenue for local governments?

Correct AnswerverifiedA

Which one of the following people is least likely to have to file a federal income tax return?

Correct AnswerverifiedShow Answer

A deduction from adjusted gross income for yourself,your spouse,and qualified dependents is:

Correct AnswerverifiedShow Answer

A person with a total tax liability of $4,350 and withholding of federal taxes of $3,975 would:

Correct AnswerverifiedShow Answer

The state of Oklahoma imposes a tax of $.17 per gallon on gasoline.What type of tax is this most likely to be?

Correct AnswerverifiedB

Most people pay federal income tax by:

Correct AnswerverifiedShow Answer

Joan Sanchez is single and earns $40,000 in taxable income.She uses the following tax rate schedule to calculate the taxes she owes. What is Joan's marginal tax rate?

Correct AnswerverifiedShow Answer

When planning to use a tax preparation service,what factors should be considered?

Correct AnswerverifiedThe follow...View AnswerShow Answer

The ______________ property tax is based on the value of land and buildings at some point in time.

Correct AnswerverifiedShow Answer

Most people pay the following taxes:

Correct AnswerverifiedE

Cameron Nelson wants to complete his own federal income tax return.He has several questions about the tax form to use and what items should be reported as income.What sources of assistance would you recommend for Cameron?

Correct AnswerverifiedThe IRS offers taxpayer assistance in se...View AnswerShow Answer

Which one of the following states does not have a general sales tax?

Correct AnswerverifiedShow Answer

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Taxable income is a result of ...
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A

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B

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The follow...
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E

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The IRS offers taxpayer assistance in se...
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