Questions and Answers
Withholdings and deductions are...
The tax on the purchase of goods or services is called _____________.
Consumption tax
The money you earn hourly for your time and effort at work is called your _____________.
Wages
What does the Form W-4 estimate?
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Every American who earns an income must file a _________ each year.
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When you make ____ money, you will pay _____ in taxes.
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If you work and earn money, you will have to pay taxes.
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When you buy clothes or check out at the grocery store, you will pay _____________.
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A fixed, annual rate of pay that doesn't change by working more or fewer hours is called ____.
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When someone says they need to file their taxes, they're talking about filling out a ________.
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What is the main IRS form that most Americans use to file their taxes?
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Property tax, inheritance tax, estate tax, and gift tax are all examples of __________.
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There are two general types of taxes. Taxes on the money you _________ and taxes on the money you ___________.
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When you buy specific items like cigarettes, alcohol, airline tickets or gas, you will pay _________.
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Renting out property or selling content on a blog are examples of ______________.
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The deadline for filing your income tax return usually falls on _________.
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Which of the following is most likely to need the help of a tax professional?
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Only a few states have inheritance tax, which...
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Net income is also called your _________.
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When you pay taxes on a purchase, the seller gets to keep that money.
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You can produce ____________ by buying and selling stocks, bonds, mutual funds, and real estate.
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Those who properly fill out their Form W-4 shouldn't have too much or too little taxes withheld.
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Using online tax software or hiring a tax professional are both good options depending on your situation.
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Wealth taxes are often dependent on _________, so it's a good idea to understand the tax rules ___________.
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Study Notes
Withholdings and Deductions
- Withholdings are expenses deducted from paychecks, reflecting taxes and benefits.
Consumption Tax
- A consumption tax applies to the purchase of goods and services.
Wages
- Wages refer to money earned on an hourly basis for labor.
Form W-4
- Form W-4 estimates tax liabilities based on individual circumstances.
Federal Tax Return
- All income-earning Americans are required to file a federal tax return annually.
Tax Implications
- Earning more money results in paying more taxes.
Tax Obligations
- If employed and earning income, individuals must pay taxes.
Sales Tax
- Sales tax is charged on purchases like clothing and groceries.
Salary
- A salary is a fixed annual pay, regardless of hours worked.
Tax Filing
- Filing taxes refers to completing a federal tax return.
Form 1040
- Form 1040 is the primary IRS form for individual tax filing.
Wealth Tax
- Property, inheritance, estate, and gift taxes are classified as wealth taxes.
Tax Categories
- Taxes are generally categorized based on earned income and expenditure.
Excise Tax
- Excise taxes apply to specific goods such as tobacco, alcohol, and gas.
Passive Income
- Passive income includes earnings from renting property or selling online content.
Income Tax Filing Deadline
- The typical deadline for income tax returns is April 15.
Tax Professional Assistance
- Self-employed individuals often require the aid of tax professionals.
Inheritance Tax
- Inheritance tax is levied on assets received from deceased individuals.
Net Income
- Net income is commonly referred to as take-home pay after taxes and deductions.
Seller and Tax Revenue
- When taxes are paid on purchases, sellers do not retain that money.
Portfolio/Investment Income
- Buying and selling assets like stocks and real estate generates portfolio or investment income.
Form W-4 Accuracy
- Correctly completing Form W-4 helps ensure appropriate tax withholding.
Tax Filing Methods
- Online tax software and hiring professionals both serve as viable tax-filing methods.
Awareness of Wealth Taxes
- Understanding local wealth tax laws is important as they vary by location.
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Description
Test your knowledge on the fundamentals of taxes, including withholdings, deductions, and various types of taxes such as sales and wealth tax. This quiz covers essential forms like W-4 and 1040, as well as the implications of earning income. Prepare to assess your understanding of tax obligations and filing processes.
