Income Tax

Question 1

I am attending a barber/cosmetology school

Answer 1

I cannot take the deduction AND claim the credit

Question 2

Good record keeping requires

Answer 2

That I substantiate all of my income and expenses shown on my income tax return

Question 3

As a professional, the tips I receive from my customers are:

Answer 3

Fully taxable and reported as income

Question 4

How could you determine if there were unreported tips?

Answer 4

Look at credit card slips
Calculate the average tip amount
observation of the stylist
(all of the above)

Question 5

What is the name of the form that is the personal tax return you must file every year?

Answer 5

1040 (A,EZ)

Question 6

What kind of information can an examiner ask in the case of an audit?

Answer 6

Appointment books
financial statements
stylist’s work schedules
(all of the above)

Question 7

What is important to do to ensure that your tax return is correct in the case of an audit?

Answer 7

Keep good records throughout the year

Question 8

What is the average markup on retail products in a salon?

Answer 8

100%

Question 9

Reporting all my wages, including tips will:

Answer 9

Increase my Social Security benefits

Question 10

Which of the following is not a source of Salon Income

Answer 10

Payroll