Unit 2 Taxes Review

Which of the following are TWO mandatory categories of government spending that are paid for by FICA taxes?

• Military and Education

• Health and Veterans’ Benefits

• Housing and Transportation

• Social Security and Medicare

The way you fill out and send your income tax forms using a computer, smartphone, etc. is called ...

• Filing the long way

• File electronically or “e-filing”

• Filing by mail

On a pay stub, the amount of money that is left after withholdings is known as…

• Gross pay
• Net pay
• Annual earnings
• Wages and tips

Which statement best describes discretionary government spending?

• A fixed amount of money spent on the same categories every year
• The money used to pay for Social Security and Medicare
• A changing amount of money spent on different categories each year
• Money that you determine how it is spent by the government when you submit your taxes

All of the following people can be claimed as a dependent for tax purposes EXCEPT…

• A 23 year old college student whose parents pay all of their expenses

• A 17 year old high school student with a part-time job whose parents pay for all of their expenses

• A 20 year old college student with a paid internship who pays for all of their own expenses

• A 25 year old with no job who has lived in their aunt/uncle's house for the last year

You are required to file a tax return in all of the following scenarios EXCEPT…

• You made $25,000 working a full-time job
• You made $3,000 from investments in the stock market
• You were self-employed and made $2,500
• You made $9,000 working a part-time job

What is the purpose of the self-employment tax (SECA)?

• To tax self-employed individuals a greater amount than regular employees since they’re more likely to make health insurance claims
• To tax self-employed individuals a lesser amount than regular employees since they generally make less money
• To tax self-employed individuals an equivalent amount for Social Security and Medicare since FICA taxes aren’t taken out of their paycheck
• To tax self-employed individuals a flat amount since they don’t pay federal or state

If you’re looking to pay as little as possible to file your taxes BUT you’re worried about making mistakes, which tax preparation method would be your best option?

• Do-it-yourself paper filing

• Online tax preparation service

• Hiring a tax professional

• Requesting the IRS complete your taxes for you

All of the following are found on a W-2 form EXCEPT…

• Wages, tips, and other compensation

• Federal and state taxes withheld

• Sales taxes paid

• FICA taxes withheld

Which of the following is the term for a tax rate that increases at higher levels of income?

• FICA tax

• Sales tax

• Flat tax

• Progressive tax