Personal Finance Courses: Taxes

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1.
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.
2.
Retired workers receive more in benefits from Social Security than they contributed to it during their working years.
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True. They receive more; this is a big advantage during one's retirement years.
3.
Which type of account helps you pay for medical expenses while also saving you money on taxes?
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Flexible spending account. A flexible spending account lets you set aside money from your pay, thus reducing the amount of income you will be taxed on.
4.
Personal information you will need to prepare your tax return includes _______.
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Your Social Security number. Personal information you will need to prepare your tax return includes your Social Security number.
5.
There is one federal income tax rate that all taxpayers pay.
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False. As you earn more money, your rate increases.