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Personal Finance Courses: Taxes

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1.
Tax adjustments, deductions and credits all have one thing in common. What is that?
Choose wisely. There is only one correct answer.
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.
2.
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.
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.
Having taxes withheld from your paycheck means you do not need to pay any more taxes.
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False. The taxes that are withheld from your paycheck are estimates of how much tax you must pay. Once you have filled out your tax return and determined the actual amount you owe, you will find that you owe more money or that you will get some money back.
5.
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.