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| 1.
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A state or local sales tax is an example of a: |
| | A) | Progressive rate structure. |
| | B) | Proportional rate structure. |
| | C) | Regressive rate structure. |
| | D) | Recessive tax structure. |
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| 2.
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A tax rate that increases as the tax base increases is an example of what kind of tax rate structure? |
| | A) | Progressive |
| | B) | Proportional |
| | C) | Regressive |
| | D) | Recessive |
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| 3.
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Jake earned $15,000 and paid $1,500 of income tax, while Jill earned $40,000 and paid $6,000 of income tax. The tax rate structure they are subject to is: |
| | A) | Progressive |
| | B) | Proportional |
| | C) | Regressive |
| | D) | Recessive |
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| 4.
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Xavier has taxable income of $68,000 that is taxed as follows:| $7,550 x 10% = | $755 | | ($30,650-$7,550) x 15% = | $3,465 | | ($68,000-$30,650) x 25%= | $9,338 | | |
| | Total Tax | $13,558 |
His average tax rate is: |
| | A) | 10%. |
| | B) | 15% |
| | C) | 20% |
| | D) | 25%. |
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| 5.
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Xavier has taxable income of $68,000 that is taxed as follows:| $7,550 x 10% = | $755 | | ($30,650-$7,550) x 15% = | $3,465 | | ($68,000-$30,650) x 25%= | $9,338 | | |
| | Total Tax | $13,558 |
His marginal tax rate is: |
| | A) | 10%. |
| | B) | 15% |
| | C) | 20% |
| | D) | 25%. |
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| 6.
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With respect to the income tax formula, which of the following statements is incorrect? |
| | A) | The simplified income tax formula is only applicable to taxpayers with taxable income less than $100,000. |
| | B) | Taxpayers are allowed certain deductions from income. |
| | C) | For many taxpayers, the simple income tax formula is sufficient to determine tax liability. |
| | D) | When calculating the tax refund or tax due with the return taxpayers need to subtract tax payments and tax credits from their tax liability. |
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| 7.
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Which of the following would disqualify a taxpayer from filing a Form 1040EZ |
| | A) | have total taxable income under $100,000 |
| | B) | be under age 65 and not blind |
| | C) | have no dependents |
| | D) | have interest income less than $2,000 |
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| 8.
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On Form 1040EZ, the permitted deduction from income for married taxpayers is: |
| | A) | $0 |
| | B) | $8,450 |
| | C) | $10,000 |
| | D) | $16,900 |
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| 9.
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Victoria determined her tax liability was $6,451. Her employer withheld $6,145 from her paychecks during the year. Victoria's tax return would show |
| | A) | a refund of $306 |
| | B) | a refund of $6,451 |
| | C) | tax due of $306 |
| | D) | tax due of $6,145 |
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| 10.
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For equivalent amounts of taxable income, the total tax liability of a couple using the married filing jointly status will be |
| | A) | less than single filing status |
| | B) | more than single filing status |
| | C) | more than married filing separately status |
| | D) | cannot be determined with the information provided |
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| 11.
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Sonya is an employee of Valley Company. Alice properly completed her Form 1040EZ tax return and received a refund from the IRS of $1,244. Alice had income tax withholdings during the year of $4,782. Alice's tax liability for the year was |
| | A) | $1,244 |
| | B) | $3,538 |
| | C) | $4,782 |
| | D) | $6,026 |
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| 12.
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The tax liability for a married couple with taxable income of $72,489 is: |
| | A) | $11,234 |
| | B) | $11,237 |
| | C) | $14,676 |
| | D) | $14,680 |
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| 13.
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Which of the following types of Regulations take the place of the Internal Revenue Code and have the full effect of law? |
| | A) | Final. |
| | B) | Legislative. |
| | C) | Temporary. |
| | D) | Proposed. |
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| 14.
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The following court hears only tax cases. |
| | A) | U.S. Court of Appeals. |
| | B) | U.S. Court of Federal Claims. |
| | C) | U.S. District Court. |
| | D) | U.S. Tax Court. |
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| 15.
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Federal tax legislation generally originates in what body? |
| | A) | Senate Finance Committee. |
| | B) | Supreme Court. |
| | C) | Internal Revenue Service. |
| | D) | House Ways and Means Committee. |
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