ECON 1503 Ch 3

If Diane was in a 25% tax bracket and received a $2,700 tax credit, by how much would her taxes be reduced?

Hint: a tax credit reduces amount owed dollar-for-dollar.

• 67.50

• 135

• 675

• 2700

Individuals are allowed to give money or items of any value to a person without being subject to estate taxes.

• True-Individuals are allowed to give money or items of any value.

• False-Individuals are allowed to give money or items valued at $14,000 or less in a year to a person without being subject to estate taxes.

Amounts given for tuition payments or medical expenses are not subject to gift taxes.

• True

• False

Cash and prizes won on television game shows are subject to both federal and state taxes.

• True

• False

The IRS has made online filing free through the:

• TurboTax

• Free File Alliance.

A worker's primary goal should be to

• Pay his or her taxes using estimates for income and deductions.

• Pay no income taxes.

• Pay the average tax rate for people working in his or her industry.

• Pay his or her fair share of taxes while taking advantage of appropriate tax benefits.

• Pay no taxes of any type.

A tax due on the purchase of gasoline is called a(n)

• Estate tax.

• Excise tax.

• Income tax.

• Real estate property tax.

A tax imposed on the value of a person's property at the time of death is called a(n)

• Estate tax.

• Excise tax.

• Income tax.

• Real estate property tax.

This tax is a major financial planning factor for most people because it is sometimes imposed at the federal, state, and local levels.

• Estate tax

• Excise tax

• Income tax

• Real estate property tax

The tax that is a major source of revenue for local governments is called a(n)

• Real estate property tax.

• Estate tax.

• Income tax.

• Gift tax.