Question 3. 3. (TCO 2) _____ can reduce taxable income. (Points : 1) Portfolio i

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Question 3.3. (TCO 2) _____ can reduce taxable income. (Points : 1)        Portfolio income
       Tax credits
       Exclusions
       Passive income
       Earned income Question 4.4. (TCO 2) Whenever an individual takes on a personal effort and receives money, this is reported as _____ income. (Points : 1)        passive
       earned
       portfolio
       excluded
       capital gains Question 5.5. (TCO 2) George Washburn had earnings from his salary of $44,000, interest on savings of $800, a contribution to a traditional individual retirement account of $2,000, and dividends from mutual funds of $600. George's adjusted income (AGI) would be (Points : 1)        $43,400.
       $44,000.
       $45,400.
       $42,000.
       $42,800. Question 6.6. (TCO 2) _____ can be calculated as a result of various items being subtracted from gross income, such as individual retirement account contributions and alimony payments. (Points : 1)        Adjusted gross income
       Taxable income
       Earned income
       Passive income
       Total exclusions Question 7.7. (TCO 2) When filing your taxes, a set amount on which no taxes are paid is called _____. (Points : 1)        itemized deductions
       withholding
       an earned tax credit
       the standard deduction
       capital gains Question 8.8. (TCO 2) Taxes owed can be reduced through _____. (Points : 1)        the standard deduction
       a tax credit
       an itemized deduction
       an exclusion
       an exemption Question 9.9. (TCO 2) _____ would qualify a person for an exemption when computing taxable income. (Points : 1)        Mortgage interest
       A tax shelter
       A dependent
       Charitable contributions
       Passive income Question 10.10. (TCO 2) Generally, the way most people pay federal income tax is by (Points : 1)        paying the total amount owed by April 15.
       filing quarterly tax payments.
       having amounts withheld from income.
       earning tax credits for various deductions. Question 11.11. (TCO 2) If you expect interest rates will decline over the next few months, you should use a(n) _____ to maximize your earnings. (Points : 1)        regular savings account
       interest-bearing checking account
       5-year certificate of deposit
       6-month certificate of deposit
       money market fund Question 12.12. (TCO 2) An example of a _____ deposit is a checking account. (Points : 1)        common
       time
       current
       loan
       demand Question 13.13. (TCO 2) When profits are generated by a mutual savings bank, they will go to the (Points : 1)        creditors.
       loan applicants.
       stockholders.
       depositors.
       community in which it operates. Question 14.14. (TCO 2) _____ are the major products offered by investment companies. (Points : 1)        Interest-bearing checking accounts
       Variable-rate loans
       Credit card accounts
       Savings bonds
       Mutual funds Question 15.15. (TCO 2) One of the characteristics of a certificate of deposit is that it can have (Points : 1)        high interest-rate risk.
       low safety for savers.
       limited liquidity.
       a variable rate of return.
       no minimum deposit amount. Question 3.3. (TCO 2) _____ can reduce taxable income. (Points : 1)        Portfolio income
       Tax credits
       Exclusions
       Passive income
       Earned income

Explanation / Answer

Question Answet Explanation 3.3. Exclussions Exclussions are not covered under Tax. Tax credit reduces Tax but not taxable income. 4.4. Earned 5.5. 43400 =44,000+800+600-2000 6.6. Earned income 7.7. itemized deductions 8.8. a tax credit 9.9. Charitable contributions this income is not taxable income and is examt from tax 10.10. paying the total amount owed by April 15. 11.11. 5-year certificate of deposit 12.12. current 13.13. stockholders. 14.14. Mutual funds 15.15. no minimum deposit amount. CD's are insured, give higher interest rates and can be issued in any denomination.

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