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There is one federal income tax rate that all taxpayers pay.

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True

False

False. As you earn more money, your rate increases.

Which of the following is true regarding tax credits?

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A tax credit reduces your taxable income as reported on Form 1040.

A tax credit reduces the actual tax you owe.

For most taxpayers, the standard tax credit will be larger and more valuable than itemizing your credits.

A tax credit reduces the actual tax you owe. Within limits, a dollar of credit reduces your tax by a dollar.

How do IRAs, 401k plans, health savings accounts and flexible spending accounts help lower your income taxes?

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You get to deduct the money you contribute to them from your income.

Participating in one of these plans means you don't have to pay any taxes at all.

They don't actually help lower your income taxes.

You get to deduct the money you contribute to them from your income. When you deduct the contributions you make to them, there is less money for you to be taxed on.

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

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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 _______.

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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.

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