Personal Finance Courses: Taxes

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1.
Everyone will have to pay Social Security tax on all their income, no matter how much it is.
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False. The amount of earnings one must pay tax on is capped, though it usually changes every year.
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.
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.
4.
Tax adjustments, deductions and credits all have one thing in common. What is that?
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They reduce the amount of tax you have to pay. Adjustments, deductions and credits all reduce the amount of tax you have to pay. They all do this in different ways.
5.
How do IRAs, 401k plans, health savings accounts and flexible spending accounts help lower your income taxes?
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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.