Question 1

Sue and Tim are married taxpayers in the 33% marginal tax bracket.In 2011,they sold common stock shares for a long-term capital gain of $3,800.They also sold some technology stock for a long-term capital loss of $9,000.In addition,they sold the home they had lived in for the past 10 years and experienced a $75,000 gain on the house.How much will their net capital gains (or losses)be for 2011? How much will they pay (or save)in taxes as a result of these transactions?

Accepted Answer

The answer of Sue and Tim are married taxpayers in...

Question 2

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The terms "tax free" and "tax deferred" [do | do not] mean the same thing.

Accepted Answer

The two terms have different meanings. "Tax free" refers to income or investment gains that are exempt from taxation, while "tax deferred" refers to income or investment gains that are not currently taxed, but will be taxed at a later date (such as with retirement accounts).

Question 3

Hector is a single taxpayer in the 28% marginal tax bracket.In 2011,he sold stock shares for a long-term capital gain of $8,500.He also sold some financial services stock for a long-term capital loss of $2,000.In addition,he sold the home that he had lived in for the past 3 years and experienced a $15,000 gain on the house.How much will his net capital gains (or losses)be for 2011? How much will he pay (or save)in taxes as a result of these transactions?

Accepted Answer

The answer of Hector is a single taxpayer in the...

Question 4

From the information given below,determine Steve's gross income for tax purposes:

Accepted Answer

The answer of From the information given below,determine Steve's gross...

Question 5

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The tax year corresponds to the [April 15 filing deadline | calendar year].

Accepted Answer

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

Question 6

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Excise taxes are similar to [real estate | sales] taxes.

Accepted Answer

Excise taxes are similar to sales taxes as both are taxes on the sale of goods or services.

Question 7

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-If you pay a professional to prepare your taxes,any errors on the return will be [your | the preparer's] responsibility.

Accepted Answer

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

Question 8

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Major software providers have online versions for preparing federal taxes which is [free to all tax filers | free to qualified tax filers].

Accepted Answer

Major software providers typically offer free online versions for preparing federal taxes, but they are usually only free for qualified tax filers (such as those with lower income levels).

Question 9

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-If you earn less than $15,000,you likely pay more in [federal income tax | social security taxes].

Accepted Answer

Social security taxes are a flat percentage of income, while federal income tax is based on a sliding scale that takes income into account. Therefore, someone earning less than $15,000 per year is likely paying more in social security taxes compared to federal income tax.

Question 10

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-When one gives a child an income producing asset,one is [maximizing their deductions | income shifting].

Accepted Answer

Giving a child an income producing asset is a form of income shifting, as the income generated from the asset will be taxed at the child's lower tax rate instead of the adult's higher tax rate. Maximizing deductions refers to finding ways to reduce taxable income, which is not applicable in this scenario.

Question 11

George,from the previous problem,is single and his standard deduction for the year is $5,800.If he is in the 25% marginal tax bracket,how much tax would he save by using his itemized deductions?

Accepted Answer

The answer of George,from the previous problem,is single and his...

Question 12

Jamie has taxable income of $45,000.She is single and her tax rates are 10% on the first $7,000 of taxable income,15% of the amount over $7,000 up to $28,400 of taxable income and 25% on the remainder.What is Jamie's tax liability,her marginal tax rate,and her average tax rate?

Accepted Answer

The answer of Jamie has taxable income of $45,000.She is...

Question 13

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-A special tax provision reduced the social security portion for the individual taxpayer by [1% | 2%] in 2011 and 2012.

Accepted Answer

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

Question 14

From the information given below,determine Marcie's gross income for tax purposes:

Accepted Answer

The answer of From the information given below,determine Marcie's gross...

Question 15

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The standard or itemized deduction,reduces the taxpayer's [taxable income | taxes due].

Accepted Answer

The standard or itemized deduction reduces the taxpayer's taxable income, not taxes due.

Question 16

Shawn earned $65,000.If the total Social Security tax rate is 15.3% then how much was his social security tax? How much would his employer pay in social security taxes for Shawn?

Accepted Answer

The answer of Shawn earned $65,000.If the total Social Security...

Question 17

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The date by which your tax liability must be paid in order to avoid late payment penalties and/or interest is [April 15 | August 15].

Accepted Answer

The tax payment deadline is April 15th, unless that date falls on a weekend or holiday, in which case the deadline is moved to the next business day.

Question 18

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-A special tax provision reduced the social security portion for the individual taxpayer in 2011 and 2012 from [6.2% to 4.2% | 4.2% to 2.2%].

Accepted Answer

The correct phrase is "6.2% to 4.2%". This reduction in the social security tax rate was in effect for the years 2011 and 2012 as a result of a tax provision enacted at that time. The correct percentage for the reduction is 2.0%. The phrase "4.2% to 2.2%" is incorrect and does not accurately describe the tax provision in question.

Question 19

George has the following expenses that he wants to include as itemized deductions for the year.His adjusted gross income is $60,000.What is the total itemized deduction he can take?

Accepted Answer

The answer of George has the following expenses that he...

Question 20

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Tax credits directly reduce a taxpayer's [taxes due | taxable income].

Accepted Answer

Tax credits directly reduce the amount of taxes owed by a taxpayer, which is the same as "taxes due". Taxable income is the amount of income that is subject to taxation, but tax credits do not reduce taxable income.

Quiz 3: Preparing Your Taxes

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The terms "tax free" and "tax deferred" [do | do not] mean the same thing.

From the information given below,determine Steve's gross income for tax purposes:

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The tax year corresponds to the [April 15 filing deadline | calendar year].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Excise taxes are similar to [real estate | sales] taxes.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -If you pay a professional to prepare your taxes,any errors on the return will be [your | the preparer's] responsibility.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Major software providers have online versions for preparing federal taxes which is [free to all tax filers | free to qualified tax filers].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -If you earn less than $15,000,you likely pay more in [federal income tax | social security taxes].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -When one gives a child an income producing asset,one is [maximizing their deductions | income shifting].

George,from the previous problem,is single and his standard deduction for the year is $5,800.If he is in the 25% marginal tax bracket,how much tax would he save by using his itemized deductions?

Jamie has taxable income of $45,000.She is single and her tax rates are 10% on the first $7,000 of taxable income,15% of the amount over $7,000 up to $28,400 of taxable income and 25% on the remainder.What is Jamie's tax liability,her marginal tax rate,and her average tax rate?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -A special tax provision reduced the social security portion for the individual taxpayer by [1% | 2%] in 2011 and 2012.

From the information given below,determine Marcie's gross income for tax purposes:

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The standard or itemized deduction,reduces the taxpayer's [taxable income | taxes due].

Shawn earned $65,000.If the total Social Security tax rate is 15.3% then how much was his social security tax? How much would his employer pay in social security taxes for Shawn?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The date by which your tax liability must be paid in order to avoid late payment penalties and/or interest is [April 15 | August 15].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -A special tax provision reduced the social security portion for the individual taxpayer in 2011 and 2012 from [6.2% to 4.2% | 4.2% to 2.2%].

George has the following expenses that he wants to include as itemized deductions for the year.His adjusted gross income is $60,000.What is the total itemized deduction he can take?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Tax credits directly reduce a taxpayer's [taxes due | taxable income].