Personal Finance and Budgeting Flashcards

Which statements about Phung's income and tax situation are correct? (Select all that apply)

What is the best reason to record income at the top of a budget?

Which is the best option for people who need the items immediately but cannot pay cash now?

What is most likely Yuri's motivation behind buying the pricier pair of sneakers?

Which of these qualify as variable expenses? (Select all that apply)

Which form does an individual use to file taxes?

What is the best way to research an expensive product?

What should a budget be based on?

Which is a kind of federal payroll tax?

At what point should consumers stop researching a product?

What is the definition of gross income?

Which describes a type of tax that people pay on money they earn?

What form must be filled out when someone is hired for a job to determine how much income tax will be withheld?

Who will be able to buy the sneakers that cost $86?

What is the sales tax rate in Sacramento, California?

Taxation and Income

Phung's income is taxed progressively at 10%, 15%, 25%, and 28%.
The initial $9,075 of Phung's annual income is taxed at 10%.
The income segment over $36,000 results in a significant increase in tax bracket.

Budgeting Principles

Recording income at the top of a budget is essential for knowing available funds.
A budget should be based on a person's net income for accurate financial planning.

Variable Expenses

Variable expenses include clothing purchases, monthly groceries, and cable TV costs.

Tax Forms

The IRS Form 1040 is used for individual tax filing.
A W-4 form is required upon hiring to determine income tax withholding amounts.

Payroll Taxes

Medicare tax is a type of federal payroll tax that individuals must pay.

Consumer Behavior

Rent-to-own plans are suitable for individuals needing items immediately but unable to pay cash.
Yuri purchases more expensive goods due to the motivation of conspicuous consumption.

Research and Shopping

Reading consumer information magazines is the most effective way to research expensive products.
Consumers should cease product research when the time or cost of research exceeds potential savings.

Additional Information

Gross income is defined as the total earnings before any deductions.
Income tax is the tax levied on an individual’s earnings.
Sales tax in Sacramento, California is set at 8.5%.
Vincent can afford the $86 sneakers, while the other boy cannot.

Test your knowledge on personal finance with these flashcards, focusing on income tax situations and budgeting strategies. Each card presents key concepts and correct statements to enhance your understanding of financial management.