Taxation Quiz

What is Adjusted Gross Income?

• Gross income plus adjustments

• Gross income less adjustments

• Net income plus deductions

• Net income less deductions

What does an Audit involve?

• Examination of personal expenses

• Examination of income tax returns by the IRS

• Review of bank statements

• Review of credit scores

What is Estimated Tax?

• The tax you owe after deductions

• The tax you estimate you will owe on income received without withholdings

• The tax you pay on investments

• The tax you owe after credits

Who is eligible for Exempt Status?

• Anyone with a high income

• Only those who know they will not earn enough in one year to owe income tax

• Anyone with dependents

• Only those who are self-employed

What is an Exemption?

• A tax credit for each dependent

• An amount you may subtract from your income for each person who depends on your income to live

• A deduction for business expenses

• A reduction in taxable income for charitable donations

What determines your Filing Status?

• Your age

• Your marital status as of the last day of the tax year

• Your income level

• Your employment status

What is Gross Income?

• All of the taxable income you receive during the year

• Income after deductions

• Income after taxes

• Income from investments only

What are Itemized Deductions?

• Standard deductions for all taxpayers

• Expenses you can subtract from adjusted gross income to determine your taxable income

• Deductions for business expenses only

• Deductions for charitable donations only

What is a Progressive Tax?

• A tax that takes a smaller share of one's income as the amount of income grows

• A tax that takes a larger share of one's income as the amount of income grows

• A tax with a fixed rate regardless of income

• A tax applied only to luxury items

What is a Proportional Tax?

• A tax with a rate that increases as income increases

• A tax for which the rate stays the same regardless of one's income

• A tax that decreases as income increases

• A tax applied only to goods and services