Personal Finance Courses: Taxes

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1.
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.
2.
All other factors being equal, waiting until which age would let you receive the most Social Security benefits?
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70. The longer you wait, up until age 70, the more you will receive in Social Security benefits.
3.
The difference between a tax deduction and a tax credit is that _______.
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A tax deduction reduces your taxable income, and a tax credit reduces your actual tax. When you do the math, you will find that tax credits get you more money back than tax deductions do.
4.
There is one federal income tax rate that all taxpayers pay.
Choose wisely. There is only one correct answer.
False. As you earn more money, your rate increases.
5.
Personal information you will need to prepare your tax return includes _______.
Choose wisely. There is only one correct answer.
Your Social Security number. Personal information you will need to prepare your tax return includes your Social Security number.