Test your knowledge

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The federal tax rate you pay will vary depending on your age.

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True

False

False. It varies depending on your filing status.

Which of the following is true regarding tax credits?

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A tax credit reduces your taxable income as reported on Form 1040.

A tax credit reduces the actual tax you owe.

For most taxpayers, the standard tax credit will be larger and more valuable than itemizing your credits.

A tax credit reduces the actual tax you owe. Within limits, a dollar of credit reduces your tax by a dollar.

Several different tax forms that get sent to you will list the income you received during the year. Which of the following does NOT list income that you received?

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W-4

W-2

1099

All of the above list income received

W-4. Your W-4 does not list income you received. But your W-2s and any 1099s you receive will.

You can take a tax deduction for some education-related expenses. Which of the following does that include?

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Interest paid on student loans

Tuition

Fees

All of the above

All of the above. All of these expenses qualify.

All other factors being equal, waiting until which age would let you receive the most Social Security benefits?

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None of these; the age does not matter

70. The longer you wait, up until age 70, the more you will receive in Social Security benefits.

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