Minh

4970 Words Jan 4th, 2015 20 Pages
Chapter 03
Taxes in Your Financial Plan

True / False Questions

1. (p. 76) Tax Freedom Day represents the day that the average person works until to pay their taxes each year.
TRUE

Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 1
Topic: Tax strategy

2. (p. 78) An example of an excise tax is Social Security.
FALSE

Social Security is a tax on earnings.

Bloom's: Comprehension
Difficulty: Easy
Learning Objective: 1
Topic: Tax strategy

3. (p. 78) Individuals are allowed to give money or items of any value to a person without being subject to taxes.
FALSE

The maximum amount that can be gifted without tax implications in 2009 is $13,000.
NOTE: This question can be
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FALSE

If taxes withheld are greater than the amount due, then you will receive a refund.

Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 2
Topic: Income taxes

17. (p. 85) Individuals who have high income reported on Form 1099 may be required to pay estimated tax payments.
TRUE

Bloom's: Knowledge
Difficulty: Medium
Learning Objective: 2
Topic: Income taxes

18. (p. 85) Federal income tax returns must be filed by April 1 of each year.
FALSE

Forms must be filed by April 15.

Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 2
Topic: Income taxes

19. (p. 85) Form 4868 allows a taxpayer to obtain a six-month extension on filing and paying federal taxes without penalty.
FALSE

The extension does not delay the payment liability.

Bloom's: Comprehension
Difficulty: Medium
Learning Objective: 2
Topic: Income taxes

20. (p. 86) All citizens of the United States are required to file a federal income tax return if their income falls below a certain level.
FALSE

Citizens whose income is above a certain level are required to file.

Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 3
Topic: Filing income taxes

21. (p. 89) Most states do not require state income taxes.
FALSE

Only seven states do not have a state