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The difference between a tax deduction and a tax credit is that _______.

A tax deduction reduces your taxable income, and a tax credit reduces your actual tax

A tax deduction reduces your actual tax, and a tax credit reduces your taxable income

A tax deduction always gets you more money at tax time

None of the above

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.

The various income tax filing statuses include _______.

Married filing separately

Head of household

Single

All of the above

All of the above. There are several statuses that determine your rate.

Which federal program provides health care coverage for all US citizens age 65 or over?

Social Security

Medicare

Medicaid

None of the above

Medicare. Medicare is paid for in part by taxes on our income.

Personal information you will need to prepare your tax return includes _______.

Your former address

Your Social Security number

Your parents' names

Your Social Security number. Personal information you will need to prepare your tax return includes your Social Security number.

Which type of account helps you pay for medical expenses while also saving you money on taxes?

401k

Flexible spending account

IRA

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.