Topic Test Answers

Gift tax falls under which tax category?

Curtis just received a raise at work increasing his salary by $8,500. He knows that an increase in salary will increase the amount of federal income taxes withheld from his paycheck. Which of the following statements best describes the effect his raise will have on state income tax withholdings?

Social Security offers all but which of the following benefits?

Mr. and Mrs. Nedage are filing a joint tax return. While listing their deductions, they find that they can deduct $2,150 from medical bills, $826 from state taxes, $3,133 from charitable donations, and $1,331 from interest on their mortgage. The standard deduction for married couples filing jointly is $8,350. How does the standard deduction compare to the Nedages’ deductions?

If 20% of all manually filed returns contain errors, and 0.05% of all electronically filed returns contain errors, how much more likely is a manual filer to make an error than an electronic filer?

Many communities today are concerned with their local government’s ability to appropriately manage the taxes it collects. If a government spends more money on expenditures than it collects in taxes, it may end up with not enough money, called deficit. Which of the following could result in a county government budget in deficit?

One possible solution to a diminishing Social Security payroll is to decrease the Social Security benefit by 13%. How would such a decrease effect the benefits on a salary of $54,000?

Consider Michelle and Gladys, two neighbors who each earn the same salary. Gladys pays less in federal income taxes than Michelle does. Which of the following is a possible explanation for this?

This year, you owed $6,414.95 in federal income tax. If you are taxed at a net rate of 17%, what was your taxable income for this year?

For which of the following would not expect to pay an excise tax?

Which group or groups can typically draw benefits that are funded by Social Security taxes? I. Disabled workers II. Laid-off workers III. Family members of deceased workers

What is the standard deduction used for?

Robert makes $951 gross income per week and keeps $762 of it after tax withholding. How many allowances has Robert claimed?

You have a gross income of $117,151 and are filing your tax return singly. You claim one exemption and can take a deduction of $2,713 for interest on your mortgage, an adjustment of $2,791 for business losses, an adjustment of $1,346 for alimony, a deduction of $2,086 for property taxes, a deduction of $2,376 for contributions to charity, and an adjustment of $1,091 for contributions to your retirement fund. The standard deduction for a single filer is $5,700, and exemptions are each worth $3,650. What is the difference between your adjusted gross income and your taxable income?

Henry is up for retirement after 35 long years at his pharmacy. Before retiring, he would like to know how much he would receive each month from Social Security if he were to retire. During his 35 years, Henry averaged an annual salary of $45,620. Assuming he would receive 42% of his annual average each year, how much can Henry expect to receive from Social Security on a monthly basis?

Oscar has elected to have 23% of his federal income tax withheld as state income tax. If $154.00 was withheld as federal income tax on his last paycheck, how much will be withheld from his paycheck for income tax in all?

Which of the following statements explains the relationship between Social Security and Medicare taxes?