Personal Finance Courses: Taxes

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1.
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.
2.
There is one federal income tax rate that all taxpayers pay.
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False. As you earn more money, your rate increases.
3.
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.
4.
Which federal program provides health care coverage for all US citizens age 65 or over?
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Medicare. Medicare is paid for in part by taxes on our income.
5.
Many retirement plans are tax-deferred. This means that the earnings that build up in them are not taxed until you take them out.
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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.