What is the purpose of filing a tax return?

  • a. To receive a tax refund
    b. To report income and calculate taxes owed
    c. To avoid paying taxes
    d. None of the above

What is the deadline for filing federal income tax returns in the United States for most individuals?

  • a. April 15
    b. March 31
    c. May 1
    d. June 30

Which of the following is a deductible expense on your income tax return?

  • a. Grocery bills
    b. Entertainment expenses
    c. Medical expenses
    d. Clothing expenses

What is the difference between a tax credit and a tax deduction?

  • a. Tax credits reduce the amount of income subject to tax, while tax deductions reduce the amount of taxes owed.
    b. Tax deductions reduce the amount of income subject to tax, while tax credits reduce the amount of taxes owed.
    c. Tax credits and tax deductions are the same thing.
    d. Both tax credits and tax deductions increase the amount of taxes owed.

What is the purpose of keeping receipts for your expenses during the year?

  • a. To track your spending
    b. To prove your eligibility for tax deductions and credits
    c. To share with friends and family
    d. None of the above

What is the concept of a tax bracket?

  • a. A tool used to calculate your tax refund
    b. The percentage of your income that goes to taxes
    c. A range of income subject to a certain income tax rate
    d. The maximum amount of income you can earn without paying taxes

In which form do most individuals report their income to the IRS in the United States?

  • a. Form 1040
    b. Form 1099
    c. Form W-2
    d. Form 1020

What is the purpose of tax planning?

  • a. To pay as little tax as legally possible
    b. To evade taxes
    c. To delay tax payments indefinitely
    d. To maximize tax refunds

What is the penalty for not filing a tax return by the deadline without an extension?

  • a. A warning letter
    b. No penalty
    c. A percentage of the unpaid taxes
    d. Confiscation of assets

What is an example of a tax-exempt investment?

  • a. Roth IRA
    b. Certificate of Deposit (CD)
    c. Savings account
    d. Individual Stocks

Answers:

  • b, 2. a, 3. c, 4. a, 5. b, 6. c, 7. a, 8. a, 9. c, 10. a