Personal Finance Courses: Taxes

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1.
Having taxes withheld from your paycheck means you do not need to pay any more taxes.
Choose wisely. There is only one correct answer.
False. The taxes that are withheld from your paycheck are estimates of how much tax you must pay. Once you have filled out your tax return and determined the actual amount you owe, you will find that you owe more money or that you will get some money back.
2.
The purpose of the W-4 form that you fill out when starting a new job is to determine _______.
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How much should be withheld from your paycheck for federal income taxes. The W-4 helps you and your employer avoid overpaying or underpaying throughout the year.
3.
Which of the following is true regarding tax credits?
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A tax credit reduces the actual tax you owe. Within limits, a dollar of credit reduces your tax by a dollar.
4.
Many retirement plans are tax-deferred. This means that the earnings that build up in them are not taxed until you take them out.
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True. To be tax-deferred means that taxes are not levied until sometime later; in the case of retirement plans, that means when you finally take the money out.
5.
All other factors being equal, waiting until which age would let you receive the most Social Security benefits?
Choose wisely. There is only one correct answer.
70. The longer you wait, up until age 70, the more you will receive in Social Security benefits.