Question 1

A taxpayer can file for an automatic extension of ___ months.

Accepted Answer

A taxpayer can file for an automatic extension of 6 months by submitting Form 4868 before the tax filing deadline. This extends the deadline for filing tax returns from April 15 to October 15.

Question 2

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The common name for Federal Insurance Contribution Act payments is [income taxes | social security].

Accepted Answer

Federal Insurance Contribution Act payments are commonly known as Social Security taxes, not income taxes.

Question 3

All major software providers have online versions for preparing federal taxes.This software is

Accepted Answer

The answer of All major software providers have online versions...

Question 4

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The major source of revenue for the federal government is [income | Social Security] taxes.

Accepted Answer

Income taxes are the primary source of revenue for the federal government, followed by payroll taxes (including Social Security taxes). However, since only one option can be selected, "income taxes" is the more accurate answer.

Question 5

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Christy lives by herself with her dog,Tex.She [can | cannot] use the Head of Household filing status.

Accepted Answer

Christy cannot use the Head of Household filing status because she does not have any dependents, such as a child or elderly parent, living with her. Therefore, option B ("cannot") is the correct choice.

Question 6

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The IRS definition of [gross | adjusted] income is "all income that is subject to federal taxes."

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 7

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Tax planning is [confined to the first quarter of the year | a year-round activity].

Accepted Answer

Tax planning should be a year-round activity and not just confined to the first quarter of the year. This allows individuals and businesses to take advantage of tax-saving opportunities and make informed financial decisions throughout the year.

Question 8

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Your income tax filing status is determined primarily by your [income | marital] status.

Accepted Answer

Your income tax filing status is determined primarily by your marital status. Your income level is a secondary factor that affects your tax filing status, but your marital status is the primary factor.

Question 9

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The highest marginal tax rate is currently [35% | 28%].

Accepted Answer

The highest marginal tax rate is currently 35%, as of the year 2021.

Question 10

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-[Both you and your employer | Only your employer] will make social security contributions based on your wages.

Accepted Answer

Both you and your employer will make social security contributions based on your wages. This is because social security contributions are split between the employee and employer, with each party contributing a certain percentage of the employee's wages.

Question 11

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The lowest marginal tax rate is currently [10% | 35%].

Accepted Answer

The lowest marginal tax rate is currently 10%.

Question 12

To qualify for the capital gain exclusion on a home sale,the seller must have resided in the residence for ___ of the previous 5 years.

Accepted Answer

The answer of To qualify for the capital gain exclusion...

Question 13

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Tax [avoidance | evasion] involves failure to accurately report income or deductions,and,in extreme cases,a failure to pay taxes altogether.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 14

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Tax [avoidance | evasion] is a perfectly legal practice.

Accepted Answer

Tax avoidance refers to the legal practice of minimizing tax liability through lawful means, while tax evasion is the illegal practice of not paying taxes owed. Therefore, the correct word to complete the statement is "avoidance."

Question 15

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Tax [avoidance | evasion] focuses on reducing taxes in ways that are legal and compatible with the intent of Congress.

Accepted Answer

Tax avoidance focuses on legally reducing tax liability, while tax evasion involves illegal actions to not pay taxes.

Question 16

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Usually a married couple will pay less income tax if they file [jointly | separately].

Accepted Answer

When a married couple files their taxes jointly, their combined income is considered, which can often result in a lower tax rate and more deductions. Filing separately may result in a higher overall tax liability.

Question 17

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-When matching Social Security contributions,employers pay [the same | a lesser] amount of Social Security taxes as/than the employee.

Accepted Answer

Employers are required to match the Social Security contributions made by their employees, which means that they pay the same amount of Social Security taxes as the employee.

Question 18

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Your marital status [will | will not] have an effect on the amount of social security tax you pay.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 19

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Federal income taxation is [progressive | regressive].

Accepted Answer

Federal income taxation is progressive, meaning that as a person's income increases, the percentage of income tax they pay also increases.

Question 20

Who would be most likely to have to pay estimated taxes?

Accepted Answer

An insurance salesman is likely self-employed or working on commission, which means they may not have taxes automatically withheld from their income. As a result, they would be required to pay estimated taxes throughout the year to avoid any penalties for underpayment. The other professions listed are more likely to have taxes withheld from their paychecks.

Quiz 3: Preparing Your Taxes

A taxpayer can file for an automatic extension of ___ months.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The common name for Federal Insurance Contribution Act payments is [income taxes | social security].

All major software providers have online versions for preparing federal taxes.This software is

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The major source of revenue for the federal government is [income | Social Security] taxes.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Christy lives by herself with her dog,Tex.She [can | cannot] use the Head of Household filing status.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The IRS definition of [gross | adjusted] income is "all income that is subject to federal taxes."

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Tax planning is [confined to the first quarter of the year | a year-round activity].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Your income tax filing status is determined primarily by your [income | marital] status.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The highest marginal tax rate is currently [35% | 28%].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -[Both you and your employer | Only your employer] will make social security contributions based on your wages.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The lowest marginal tax rate is currently [10% | 35%].

To qualify for the capital gain exclusion on a home sale,the seller must have resided in the residence for ___ of the previous 5 years.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Tax [avoidance | evasion] involves failure to accurately report income or deductions,and,in extreme cases,a failure to pay taxes altogether.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Tax [avoidance | evasion] is a perfectly legal practice.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Tax [avoidance | evasion] focuses on reducing taxes in ways that are legal and compatible with the intent of Congress.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Usually a married couple will pay less income tax if they file [jointly | separately].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -When matching Social Security contributions,employers pay [the same | a lesser] amount of Social Security taxes as/than the employee.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Your marital status [will | will not] have an effect on the amount of social security tax you pay.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Federal income taxation is [progressive | regressive].

Who would be most likely to have to pay estimated taxes?