Taxes

Question 1

Tax Rate Applied to a taxpayer’s last dollar of income

Answer 1

Marginal Tax Rate

Question 2

What provides for a dollar for dollar reduction in Taxes?

Answer 2

Credits

Question 3

Specific Expenses that can be subtracted from AGI to reduce taxable income

Answer 3

Itemized Deductions

Question 4

Tax-credit that reduce one’s final tax liability below $0 resulting in a payment from the government is?

Answer 4

Refundable Tax Credit

Question 5

Type of reduction taken to arrive at taxable income that cannot be taken by a taxpayer if he/she itemizes deductions

Answer 5

Standard Deduction

Question 6

A client is having hard time meeting expenses each month. Which tax management strategy could be helpful?

Answer 6

Increase Tax Withholdings Allowances

Question 7

In the 25% tax bracket. Can claim a tax credit of $200. How much will you save in taxes?

Answer 7

$200

Question 8

Term for directly transferring funds by electronic means from a consumer’s account to another

Answer 8

Electronic Funds Transfer

Question 9

Interest-bearing savings instrument that requires people to deposit money for a fixed amount of time.

Answer 9

Certificate of Deposit

Question 10

Disclosed standardized rate of interest paid on accounts at depository institutions

Answer 10

Annual Percentage Yield

Question 11

Define Tax-sheltered income

Answer 11

Income that is exempt from taxes in the current year but that will be subject to taxation in a later tax year. Tax sheltered returns on savings/investments provide much greater returns because more money is available to be invested.