| Question | Answer |
| T/F: According to the ability to pay principle of taxation, people who have higher incomes should pay a larger share of their income in tax. | True |
| T/F: Your W-4 helps your employer know how much to withhold from your pay. | True |
| T/F: The people whom you support financially, such as children, are dependents. | True |
| T/F: The law that requires worker to contribute to social security and Medicare is the Federal Insurance Contributions Act. | True |
| T/F: Gross income is the amount you receive after withholdings are subtracted from your gross pay. | False |
| T/F: It is financially beneficial to save your money in a bank rather than let your employer withhold more taxes than you think you will owe for the year. | True |
| Most young people do not qualify to use the simplest of the income tax forms, 1040 EZ. | False |
| The federal agency that collects taxes is the Internal Revenue Service. | True |
| The IRS will impose a fine on any taxpayer who fails to sign his or her tax return before it is filed. | False |
| Employers pay twice as much social security and Medicare than each employee does. | False |
| Taxes on property that will be inherited from a deceased person are called _____.
a. property taxes
b. estate taxes
c. excise taxes
d. tariffs | b. estate taxes |
| The amount you earn before taxes are withheld is your ____.
a. gross income
b. net income
c. disposable income
d. taxable income | a. gross income |
| Employers must withhold from your paycheck ____.
a. sales taxes
b. excise taxes
c. social security taxes
d. tariffs | c. social security taxes |
| Janette wants to take her family on a vacation to Orlando, Florida, where she expects to rent a car. The tax imposed on gasoline and airline travel is what type of tax?
a. public good tax
b. business tax
c. excise tax
d. sales tax | c. excise tax |
| Last year Pilar earned $32,200 before taxes working as a police officer. She also earned $9,600 before taxes working part-time on the weekends as a security guard. She had no other income during the year. The $41,800 she earned before taxes is known as he | b. adjusted gross income |
| The number of ____ you claim on your W-4 determines the amount of money withheld from your pay.
a. principles
b. refunds
c. allowances
d. deductions | c. allowances |
| A set of forms that taxpayer use to calculate their tax obligation is a ____.
a. W-4
b. W-2
c. tax return
d. bank statement | c. tax return |
