Personal Finance Courses: Taxes

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1.
The difference between a tax deduction and a tax credit is that _______.
Choose wisely. There is only one correct answer.
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.
2.
You can take a tax deduction for some education-related expenses. Which of the following does that include?
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All of the above. All of these expenses qualify.
3.
Having taxes withheld from your paycheck means you do not need to pay any more taxes.
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False. The taxes that are withheld from your paycheck are estimates of how much tax you must pay. Once you have filled out your tax return and determined the actual amount you owe, you will find that you owe more money or that you will get some money back.
4.
What type of tax increases as your income increases?
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Progressive tax. Income tax is an example of a progressive tax.
5.
Only employees pay Social Security taxes on their earnings.
Choose wisely. There is only one correct answer.
False. Employers pay the same amount on behalf of their employees, according to how much the employees pay.