Personal Finance Courses: Taxes

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1.
There is one federal income tax rate that all taxpayers pay.
Choose wisely. There is only one correct answer.
False. As you earn more money, your rate increases.
2.
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.
3.
If you had more income tax taken out of your paycheck than you actually owe in taxes, what can you expect to happen?
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You will get a refund. You had too much taken out. When you do your taxes in the spring, you will find out how much you will get back.
4.
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.
5.
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.