Personal Finance Courses: Taxes

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
Which saves you more money -- the standard deduction or itemized deductions?
Choose wisely. There is only one correct answer.
It depends. For most people, the standard deduction saves more money. But for others, itemized deductions save more. When you do your taxes, you will find out which is better for you.
2.
Everyone will have to pay Social Security tax on all their income, no matter how much it is.
Choose wisely. There is only one correct answer.
False. The amount of earnings one must pay tax on is capped, though it usually changes every year.
3.
The purpose of the W-4 form that you fill out when starting a new job is to determine _______.
Choose wisely. There is only one correct answer.
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.
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.
Choose wisely. There is only one correct answer.
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.
What is the name of the United States' tax collection agency?
Choose wisely. There is only one correct answer.
The Internal Revenue Service. The Internal Revenue Service is the agency that collects taxes for the United States.