Reference no: EM133112172
Questions -
Q1. Which of the following is an expense that is subtracted from total income to arrive at adjusted gross income?
A. Long-term capital gains
B. Individual retirement account contributions
C. Child-care tax credit
D. Lottery winnings
Q2. A $7000 tax credit for someone with a 35 percent marginal tax rate is worth
A. $2450.
B. $9450.
C. $4550.
D. $7000.
Q3. If you sell shares of stock that you have owned for 15 months, any profit made on the sale would be classified as
A. a long-term capital gain.
B. earned income.
C. a short-term capital gain.
D. ordinary income.
Q4. Patricia has W-2 gross earnings of $127000. A total of $8700 of her income was deferred to her company's retirement plan, and $5800 was used to pay for her health-care premiums. What will be her W-2 taxable income?
A. $112500
B. $118300
C. $127000
D. $121200
Q5. John and Patricia had an adjusted gross income of $75200. They file taxes jointly and the standard deduction for married filing jointly is $24400. They listed their itemized expenses as follows: home mortgage interest, $4770; house property tax, $5910; state income tax, $3000; and charitable gifts (market value), $255. How much do they owe in federal income tax?
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Schedule Y-1. 2019 Tax Rate Schedule for Married Filling Jointly
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If your taxable income is:
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Over:
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But more than:
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You will owe:
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Taxable income over:
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$0
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$19,400
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10% of
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$0
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$19,400
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$78,950
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$1,940 + 12% of
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$19,400
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$78,950
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$168,400
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$9,086 + 22% of
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$78,950
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A. $7358
B. $6970
C. $5708
D. $6096
Q6. The alternative minimum tax was designed to
A. avoid double taxation and offset taxes paid to another country against federal income taxes owed.
B. make sure that low-income people don't take advantage of too many special tax rules to avoid paying their fair share of taxes.
C. make sure that high-income people don't take advantage of too many special tax rules to avoid paying their fair share of taxes.
D. reduce the tax burden on working parents by providing an alternative tax schedule.
Q7. Which of the following is not deductible from income for federal income taxes?
A. Medical flexible spending account contribution
B. Traditional IRA contribution
C. Employer retirement plan contribution
D. Roth IRA contribution
Q8. Anita contributes 5% of her salary to her employer's qualified retirement plan. If she earns a gross salary of $60,000 and her marginal tax rate is 24%, how much federal income tax is she saving?
A. $3,000
B. $720
C. $1,440
D. $14,400
Q9. Chris and Lisa are married filing a joint return and have $14100 in taxable income. They qualified for $6777 in earned income tax credits, and their marginal tax rate is 10%. If they had $1310 in federal taxes withheld, determine their tax due or refund to be received?
A. $6677 refund
B. $578 refund
C. $100 tax owed
D. $0 tax owed
Q10. The formula to calculate the APR is the
A. outstanding loan balance divided by total annual finance charges.
B. total annual finance charges plus annual fee divided by average loan balance.
C. average loan balance divided by the total annual finance charges.
D. total annual finance charges divided by outstanding loan balance.
Q11. The quoted rate on your credit card is 18 percent and the card has a $56 annual fee. If your average daily balance for the billing period is $1120, how much will your finance charge for that period be?
A. $16.80
B. $72.80
C. $201.60
D. $17.64
Q12. The current market value of a home is $236000 with a mortgage balance of $165200. If the lender requires a 90% loan to value ratio, what is the home equity credit limit on this house?
A. $63720
B. $212400
C. $148680
D. $47200
Q13. When the consumer price index (CPI) increases,
A. the prices of goods and services are more expensive.
B. you can buy goods and services cheaper.
C. you will earn less on your investments.
D. the value of the dollar is high.
Q14. Dorothy bought a car 3 years ago for $24000 and financed the full purchase price with a 4 year (48 month) simple interest car loan at 5% interest (monthly payment = $552.70). If she has made all of her payments on time and has 12 payments remaining, her current loan balance (rounded to the nearest dollar) is:
A. $4101
B. $5303
C. $6456
D. $6632
Q15. One year from now, you need to have $5800 to pay your tuition. How much do you need to invest today if you can earn 8% interest, compounded annually?
A. $4825.47
B. $5370.37
C. $4700.17
D. $4180.67