Personal Finance Courses: Taxes

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1.
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.
2.
What type of tax increases as your income increases?
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Progressive tax. Income tax is an example of a progressive tax.
3.
Which type of account helps you pay for medical expenses while also saving you money on taxes?
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Flexible spending account. A flexible spending account lets you set aside money from your pay, thus reducing the amount of income you will be taxed on.
4.
Several different tax forms that get sent to you will list the income you received during the year. Which of the following does NOT list income that you received?
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W-4. Your W-4 does not list income you received. But your W-2s and any 1099s you receive will.
5.
Only employees pay Social Security taxes on their earnings.
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False. Employers pay the same amount on behalf of their employees, according to how much the employees pay.