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Personal Finance Courses: Taxes

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1.
What type of tax increases as your income increases?
Choose wisely. There is only one correct answer.
Progressive tax. Income tax is an example of a progressive tax.
2.
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.
3.
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.
4.
If you are taking tax deductions for meals, car expenses, and travel, you are most likely _______.
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A small business owner. Small business owners get to deduct a lot of expenses from their income, thus saving them money. This is one of the perks of being in business for yourself.
5.
Personal information you will need to prepare your tax return includes _______.
Choose wisely. There is only one correct answer.
Your Social Security number. Personal information you will need to prepare your tax return includes your Social Security number.