Chapter 03 Taxes in Your Financial Plan

Posted on Posted in General General Questions, General Questions

50. (p. 81) Athena
wants to determine if she should itemize her deductions. She has identified
several possible deductions. Which of the following is NOT a proper
deduction?
A. Contributions to charitable organizations
B. Mortgage interest
C. Medical and dental expenses in excess of 7.5% of AGI
D. Miscellaneous expenses
less than 2% of AGI
E. State income taxes

51. (p. 81) Shannon
is working on her federal income tax form and wants to determine if she should
itemize her deductions. She has identified several possible deductions. Which
of the following is an acceptable deduction?
A. $10,000 gift to her cousin
B. Credit card interest
C. Medical and dental expenses less than 7.5% of AGI
D. Miscellaneous expenses
in excess of 2% of AGI
E. Moving expenses for a new job that is at least 25
miles from her old home


52. (p. 82) How
long should you generally keep tax records?
A. Until you file your returns
B. 3 years
C. 5 years
D. 10 years
E. 15 years


53. (p. 82) Fred
has been completing his own tax returns for years. The IRS has recently
contacted him with questions about some of his prior returns. How many years
back is he responsible for providing documentation?
A. Until he files his returns
B. 3 years
C. 6 years
D. 10 years
E. 15 years

54. (p. 82) When
Paul completes his taxes, he can include all of the following as exemptions except
A. His 12 year old son
B. Himself
C. His 22 year old daughter who is a full-time student
D. His wife
E. His 20 year old son who
is working full-time and living in an apartment

.

55. (p. 82) In
2008, taxable income was reduced by ______ for each exemption claimed.
A. $1,000
B. $2,500
C. $3,500
D. $5,000
E. $10,000

56. (p. 83) In
2008, federal tax tables included tax rates of:
A. 0%, 10%, 20%, 30%, 40%, 50%
B. 7%, 15%, 30%, 33%, 38%, 52%
C. 0%, 25%, 50%, 75%
D. 10%, 15%, 25%, 28%, 33%,
35%
E. 0%, 5%, 20%, 30%, 50%


57. (p. 84) The
taxes based on the total tax due divided by taxable income is called
A. AMT
B. Average tax rate
C. Income tax rate
D. Marginal tax rate
E. Total tax rate


58. (p. 84) The
tax designed to ensure that those who receive tax breaks also pay their fair
share of taxes is called
A. AMT
B. Average tax rate
C. Income tax rate
D. Marginal tax rate
E. Total tax rate


59. (p. 84) The
tax due on the next dollar of income is referred to as the
A. AMT
B. Average tax rate
C. Income tax rate
D. Marginal tax rate
E. Total tax rate

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