Personal Finance Courses: Taxes

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1.
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.
2.
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.
3.
What type of tax increases as your income increases?
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Progressive tax. Income tax is an example of a progressive tax.
4.
What is the name of the United States' tax collection agency?
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The Internal Revenue Service. The Internal Revenue Service is the agency that collects taxes for the United States.
5.
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.