Personal Finance Courses: Taxes

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1.
When it comes to your taxes, what is the standard deduction?
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A pre-set amount of money that you get to deduct. As opposed to itemized deductions, the standard deduction is simpler and saves more money for most taxpayers.
2.
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.
3.
There is one federal income tax rate that all taxpayers pay.
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False. As you earn more money, your rate increases.
4.
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.
5.
Only employees pay Social Security taxes on their earnings.
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False. Employers pay the same amount on behalf of their employees, according to how much the employees pay.