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Multiple Choice Quiz
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1

An excise tax is a tax on your wealth.
A)True.
B)False.
2

Every citizen or resident of the U.S. must file a federal income tax form if their income is above a certain amount based on their filing status.
A)True.
B)False.
3

When you receive an audit notice you have the right to request more time to prepare for the audit.
A)True.
B)False.
4

You own 1000 shares of Abbot Laboratories and they paid you a dividend of $.94 per share last year. This money is part of:
A)Earned income
B)Investment income
C)Passive income
D)Other income
E)None of the above
5

Your adjusted gross income is $34,500. You have $12,000 in medical expenses for the year. What would be your itemized deduction for your medical expenses?
A)$12,000
B)$9412.50
C)$2587.50
D)$0
E)None of the above
6

Which state does not have a state income tax?
A)North Carolina
B)Texas
C)California
D)New Hampshire
E)New York
7

Which of the following is not likely to be an allowable deduction (either in whole or part) for federal income taxes?
A)The $2.50 per day in tolls that you pay to drive to and from your office at work every day.
B)The $1500 you pay to attend a conference to further your career.
C)The $15,000 in medical expenses you incurred during the year
D)The $2000 in moving expenses you incurred in moving from Florida to North Carolina for a new job.
E)All of the above are allowable deductions.
8

____________ are amounts subtracted from adjusted gross income to arrive at taxable income. There is either a standard amount or itemized amounts in certain categories such as medical, charitable contributions and others.
A)Deductions
B)Exemptions
C)Reductions
D)Deferrals
9

The ____________ is total taxes owed divided by taxable income.
A)Average tax rate
B)Marginal tax rate
C)Normal tax rate
D)Abnormal tax rate
10

Interest income from which are issued by state and local governments are not subject to federal income taxes.
A)Treasury bonds
B)Corporate bonds
C)Municipal bonds
D)Treasury bills





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