Basics Beginner: The Basics of Tax Planning

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1.
What kind of retirement planning contributions can help you save money on filing your taxes currently?
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A traditional IRA. Contributions to a traditional IRA can help you save money on filing your taxes currently.
2.
Contributions a business owner makes to his or her own 401(k) are deductible by the business.
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True. Contributions a business owner makes to all employees' 401(k) accounts are generally deductible by the business.
3.
When planning your investments, it is important to recognize that ______.
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There are many sound assets that will increase your wealth over the long haul but which produce little or no current income. Examples include raw land or good growth stocks.
4.
Which of the following statements is true?
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Distributions from a health savings account that are used to pay qualified medical expenses are not taxed. Moreover, contributions to the HSA reduce taxable income.
5.
The kiddie tax is a term that applies to what type of income?
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Unearned income received by people under a certain age. The kiddie tax applies to investment income and other types of unearned income.