FiCEP Study Guide (Final) QUESTIONS WITH ANSWERS

FiCEP Study Guide (Final) QUESTIONS |\ |\ |\ |\ |\




WITH ANSWERS |\




A tax is defined as a contribution that supports the _____
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



of a government. - CORRECT ANSWERS ✔✔operating
|\ |\ |\ |\ |\ |\ |\



costs


A _____ tax requires a taxpayer to pay more tax as their
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



income increases. (Federal and state income taxes are
|\ |\ |\ |\ |\ |\ |\ |\



examples) - CORRECT ANSWERS ✔✔progressive |\ |\ |\ |\




A _____ tax charges the same percentage of the cost of a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



good or service, no matter what the taxpayer earns.
|\ |\ |\ |\ |\ |\ |\ |\ |\



(Sales tax, gas taxes, and liquor taxes are examples) -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\



CORRECT ANSWERS ✔✔regressive |\ |\




Sometimes taxes are called _____. - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\ |\



✔✔fees or surcharges |\ |\




A _____ could include the cost of a driver's license or a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



hunting license. - CORRECT ANSWERS ✔✔fee
|\ |\ |\ |\ |\




A _____ could be a gasoline tax, tobacco tax, or liquor tax.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



- CORRECT ANSWERS ✔✔surcharge
|\ |\ |\ |\

,Taking care of _____ is as important for a member's
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\



financial well-being as it is to pay their bills on time. -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



CORRECT ANSWERS ✔✔tax obligations |\ |\ |\




Any _____ from the IRS should be reviewed and dealt with
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



as soon as possible. - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\



✔✔correspondence


If you have not been able to resolve a problem with the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



IRS, seek assistance from the _____. - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\



✔✔taxpayer advocate service.
|\ |\ |\




Complex tax situations might require members to hire a
|\ |\ |\ |\ |\ |\ |\ |\ |\



_____. - CORRECT ANSWERS ✔✔tax professional
|\ |\ |\ |\ |\




_____% of taxpayers may be eligible for free tax filing
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\



assistance. - CORRECT ANSWERS ✔✔70 |\ |\ |\ |\




If members get a large refund, they might want to change
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\



their _____ if the money is needed in their monthly
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



budget. - CORRECT ANSWERS ✔✔filing status
|\ |\ |\ |\ |\

,Caution members that using refund anticipation loans can
|\ |\ |\ |\ |\ |\ |\



be a _____ way to get instant access to their refund. -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



CORRECT ANSWERS ✔✔costly |\ |\




The first choice for using a tax refund is to _____. -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



CORRECT ANSWERS ✔✔pay down debt |\ |\ |\ |\




Other tax authorities that members must pay attention to
|\ |\ |\ |\ |\ |\ |\ |\



are state income tax, property tax, and _____. - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



ANSWERS ✔✔self-employment quarterly taxes |\ |\ |\




Examples of _____ are wages, salaries and tips, interest
|\ |\ |\ |\ |\ |\ |\ |\ |\



income, alimony, business income, capital gains,
|\ |\ |\ |\ |\ |\



pensions and annuities, other forms of income, and
|\ |\ |\ |\ |\ |\ |\ |\



distributions from a traditional IRA. - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\ |\



✔✔taxable income |\




Examples of ____ are child support payments, life
|\ |\ |\ |\ |\ |\ |\ |\



insurance benefits paid to a beneficiary, gifts and
|\ |\ |\ |\ |\ |\ |\ |\



inheritances from parents, social security benefits, |\ |\ |\ |\ |\ |\



benefits from welfare, and qualified distributions from
|\ |\ |\ |\ |\ |\ |\



roth IRAs. - CORRECT ANSWERS ✔✔non-taxable income
|\ |\ |\ |\ |\ |\




_____ can make a difference in the taxes paid. - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



ANSWERS ✔✔filing status |\ |\

, Examples of _____ are single, married filing jointly, |\ |\ |\ |\ |\ |\ |\ |\



married filing separately, head of household, and
|\ |\ |\ |\ |\ |\ |\



qualified widow or widower with dependent children. -
|\ |\ |\ |\ |\ |\ |\ |\



CORRECT ANSWERS ✔✔filing status |\ |\ |\




Saving for retirement can also save taxes by making
|\ |\ |\ |\ |\ |\ |\ |\ |\



contributions to a _____. - CORRECT ANSWERS ✔✔401(k) |\ |\ |\ |\ |\ |\ |\ |\



plan


If a person is in a 25% income bracket, they could save
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



25% of the money they deposit into a _____. - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



ANSWERS ✔✔traditional IRA |\ |\




Financial counseling clients can manage some of the risks
|\ |\ |\ |\ |\ |\ |\ |\



in life by having the right types and amounts of _____. -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



CORRECT ANSWERS ✔✔insurance |\ |\




An _____ in a car you financed at the credit union could be
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



held by both you and the credit union. - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



ANSWERS ✔✔insurable interest |\ |\




You can make a better choice about insurance coverage if
|\ |\ |\ |\ |\ |\ |\ |\ |\



you evaluate your _____. - CORRECT ANSWERS ✔✔risks
|\ |\ |\ |\ |\ |\ |\ |\