Wk 29: EOL Exit Ticket 9.5, 9.6, & 9.7 - Tang Xiong | Library

Required

2

If you’re looking to pay as little as possible to file your taxes BUT you’re worried about making mistakes, which tax preparation method would be your best option?

Using tax preparation software with guided assistance

Hiring a certified public accountant (CPA)

Filing a paper return by yourself

Paying for a premium tax preparation service

Required

2

All of the following are found on a W-2 form EXCEPT…

Social Security and Medicare wages

The number of allowances claimed on a W-4

Amount of federal income tax withheld

Total wages earned during the year

Required

2

Which of the following is the term for a tax rate that increases at higher levels of income?

Progressive tax

Proportional tax

Regressive tax

Flat tax

Required

2

When deciding whether to itemize deductions or take the standard deduction, what should primarily guide a taxpayer’s decision?

The type of job the taxpayer has

Whether itemized deductions exceed the standard deduction amount

Whether the taxpayer is self-employed

The taxpayer’s income level

Required

2

Lucas is reviewing his tax return and notices that both tax credits and tax deductions reduce his overall tax burden. What is the primary difference between a tax credit and a tax deduction?

A tax deduction reduces taxable income, while a tax credit directly reduces the amount of tax owed.

A tax credit and a tax deduction function the same way and can be used interchangeably.

A tax deduction provides a dollar-for-dollar reduction in tax owed, while a tax credit only applies to business expenses.

A tax credit reduces taxable income, while a tax deduction directly reduces the amount of tax owed.

Required

2

Sophia is discussing tax responsibilities with her accountant. Which of the following scenarios is an example of tax evasion?

Leo forgets to report a small cash tip he received while working at a café.

Olivia contributes to a retirement account to lower her taxable income.

Noah maximizes his deductions by claiming all eligible business expenses.

Emma deliberately underreports her income to reduce her tax liability.

Required

2

Liam and Ava are discussing financial strategies. They come across the concepts of tax avoidance and tax evasion. Why is tax avoidance considered legal while tax evasion is illegal?

Tax avoidance and tax evasion are both illegal, but tax avoidance has lighter penalties.

Tax avoidance involves using legal methods to minimize tax liability, while tax evasion involves intentionally misrepresenting information to evade taxes.

Tax evasion is only illegal if a person is caught, whereas tax avoidance is always encouraged by tax authorities.

Tax avoidance is illegal in some countries but legal in others, while tax evasion is always legal.

Required

2

Daniel earned $40,000 last year and is preparing to file his taxes. He has the option of choosing either a $1,000 tax credit or a $1,000 tax deduction. Which option should he choose and why?

Both options are equally beneficial, so it does not matter which one he chooses.

The $1,000 tax credit, because it directly reduces the amount of tax owed, making it more valuable than a deduction.

The $1,000 tax deduction, because it reduces taxable income dollar-for-dollar, making it more effective than a credit.

The choice depends on his filing status, as tax credits only apply to individuals with dependents.

Required

2

Olivia is a single taxpayer who earned $40,000 last year and is taking the standard deduction($14,600). Based on the 2024 U.S. federal tax brackets, how much will she owe in federal income taxes?

$5,500

$4,400

$3,600

$2,300

Required

2

James is considering relocating to a state with no income tax to reduce his overall tax burden. Which of the following states does not impose a state income tax?

Texas

New York

Illinois

California