Chapter 21

Question 1

the total amount of taxes owed

Answer 1

tax liabilty

Question 2

A federal tax collected on the value of a person’s property at the time of his or her death

Answer 2

estate tax

Question 3

A state tax collected on the property left by a person to his or her heir(s) in a will

Answer 3

inheritance tax

Question 4

A tax of wages, salaries, and self-employed earnings

Answer 4

income tax

Question 5

A form, such as 1040 or 1040EZ, on which a taxpayer reports how much money he or she received from work and other sources and the exact taxes that are owed

Answer 5

income tax return

Question 6

Income that is not subject to taxes

Answer 6

exclusion

Question 7

Gross income after calculating certain reductions to income

Answer 7

adjusted gross income

Question 8

Adjusted gross income minus any allowable tax deductions and exemptions

Answer 8

taxable income

Question 9

An expense that can be subtracted from adjusted gross income to figure taxable income

Answer 9

tax deduction

Question 10

An amount of money set by the IRS that is not taxed

Answer 10

standard deduction

Question 11

A specific expense, such as a medical expense, that can be deducted from th adjusted gross income

Answer 11

iteamized deduction

Question 12

Deduction from adjusted gross income for the taxpayer, the spouse, and qualified dependents

Answer 12

exemption

Question 13

An amount of money that can be subtracted directly from taxes you owe

Answer 13

tax credit

Question 14

An adjustment to the tax withheld from your paycheck, based on your marital status and whether you have dependents

Answer 14

allowance

Question 15

an extended dead line for filing an income tax return

Answer 15

extension

Question 16

a detailed examination of a tax return by the IRS

Answer 16

tax audit

Question 17

a tax on specific good and services such as gasoline, air travel, and telephone service collected by federal and state governments

Answer 17

excise tax

Question 18

someone you support financially, as a child

Answer 18

dependant

Question 19

lack of attention

Answer 19

negligence

Question 20

collects

Answer 20

levies

Question 21

an explination

Answer 21

clarification

Question 22

placing in danger

Answer 22

jeapordizing

Question 23

The tax a person pays when he or she buys a music CD is…
A. Sales Tax
B. Excise Tax
C. Estate Tax
D. Gift Tax

Answer 23

sales tax

Question 24

An example of an inheritance tax is the money collected on…
A. Pizza order
B. Cigarettes and gasoline
C. Decreases personal money
D. Property left in a will

Answer 24

property left in a will

Question 25

The federal government's leading source of revenue is… A. Property taxes B. Sales taxes C. Income taxes D. Social Security Taxes

Answer 25

income taxes

Question 26

In which category do tips belong? A. Earned income B. Dividend income C. Interest income D. Amount of taxes owed

Answer 26

earned income

Question 27

An exemption is subtracted from a person… A. Gross income B. Adjusted gross income C. Taxable income D. Amount of taxes owed

Answer 27

adjusted gross income

Question 28

The money a person receives from the government when he or she pays too much in taxes is called a tax… A. Liability B. Refund C. Credit D. Exclusion

Answer 28

refund

Question 29

A W-4 form determines the amount an employee will… A. Make in estimated payments B. Pay in taxes C. Receive in Social Security D. Have withheld

Answer 29

have withheld

Question 30

If a person cannot file his or her federal tax return by April 15, he or she must file a… A. Form 4868 B. Form 1040EZ C. W-2 form D. Form 1099-INT

Answer 30

form 4868

Question 31

Of the following steps, which is the last a person performs when preparing his or her tax return? A. Entering total wages B. Subtracting deductions from adjusted gross income C. Subtracting tax owed from tax withheld D. Claiming an earned income tax credit

Answer 31

Subtracting tax owed from tax withheld

Question 32

Which amounts are tax-deferred? A. Interest paid on mortgage loans B. Real estate taxes C. Interest made on municipal bonds D. Investments in IRAs

Answer 32

investments in IRAs

Question 33

An example of a(n) ______ is interest earned on municipal bonds which is often exempt from federal income tax.

Question 34

A child is an example of a(n) ______ or someone you support financially.

Answer 34

dependant

Question 35

By filling for 4868 by April 15th you can receive a four-month ______ for filing an income tax return.

Answer 35

extension