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Which of the following is true regarding tax credits?

A tax credit reduces your taxable income as reported on Form 1040.

A tax credit reduces the actual tax you owe.

For most taxpayers, the standard tax credit will be larger and more valuable than itemizing your credits.

A tax credit reduces the actual tax you owe. Within limits, a dollar of credit reduces your tax by a dollar.

The purpose of the W-4 form that you fill out when starting a new job is to determine _______.

How much you will earn during the year

How much should be withheld from your paycheck for federal income taxes

Whether you will get a refund when doing your taxes

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.

What is the name of the United States' tax collection agency?

The federal government

The Internal Revenue Service

The State Department

The Treasury

The Internal Revenue Service. The Internal Revenue Service is the agency that collects taxes for the United States.

Social Security is a federal _______.

Health insurance program

Retirement income program

Disability income program

Retirement and disability income program

Retirement and disability income program.

What kind of retirement planning contributions can help you save money on filing your taxes currently?

A health savings account

A traditional IRA

A Roth 401(k)

A traditional IRA. Contributions to a traditional IRA can help you save money on filing your taxes currently. Roth 401(k)s cannot, and health savings accounts are not retirement plans.