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If you had more income tax taken out of your paycheck than you actually owe in taxes, what can you expect to happen?

You will get a refund.

You will owe more taxes.

The government will call it even.

You will get a refund. You had too much taken out. When you do your taxes in the spring, you will find out how much you will get back.

How do IRAs, 401k plans, health savings accounts and flexible spending accounts help lower your income taxes?

You get to deduct the money you contribute to them from your income.

Participating in one of these plans means you don't have to pay any taxes at all.

They don't actually help lower your income taxes.

You get to deduct the money you contribute to them from your income. When you deduct the contributions you make to them, there is less money for you to be taxed on.

The federal tax rate you pay will vary depending on your age.

True

False

False. It varies depending on your filing status.

The difference between a tax deduction and a tax credit is that _______.

A tax deduction reduces your taxable income, and a tax credit reduces your actual tax

A tax deduction reduces your actual tax, and a tax credit reduces your taxable income

A tax deduction always gets you more money at tax time

None of the above

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.

Social Security is a federal _______.

Health insurance program

Retirement income program

Disability income program

Retirement and disability income program

Retirement and disability income program.