EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED. FIRST PUBLISH OCTOBER 2024.
FiCEP Final : CUNA Review Study Guide
Select the statement that correctly describes a progressive tax. - Answer✔✔-A progressive tax requires
people to pay more as they earn more.
Pick the statement that best describes a regressive tax. - Answer✔✔-A regressive tax charges the same
tax rate regardless of the taxpayer's income.
Why are government fees and surcharges sometimes described as a form of tax? - Answer✔✔-Because
they generate income for the government.
Which taxing authorities are worthy of the member's attention? - Answer✔✔-The member must attend
to all tax authorities at all levels of government to maintain their financial well-being.
How do taxes impact your personal spending? - Answer✔✔-Taxes can make personal spending go up or
down.
Which is larger: the penalty for failing to pay federal income taxes on time, or the penalty for failing to
file a tax return when taxes are owed? - Answer✔✔-The penalty for failing to file a tax return is
significantly higher.
What is the right attitude to take toward taxes to protect your financial well-being? - Answer✔✔-Taxes
are an essential financial responsibility.
When is the IRS most likely to impose the maximum penalty on taxpayers? - Answer✔✔-When they are
forced to track down the taxpayer.
Page 1/24
,EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED. FIRST PUBLISH OCTOBER 2024.
What is a good rule to follow when dealing with a tax auditor or another issue involving the IRS? -
Answer✔✔-Never assume the IRS is always correct.
What is the financial counselor's role in aiding members with complex tax issues? - Answer✔✔-The
counselor provides basic information and refers members to tax programs or tax experts.
What happens when taxpayers who file a late return for any or all of the 4 most recent tax years are
owed a refund? - Answer✔✔-No penalty is charged and the taxpayer gets the full refund amount.
What tax services are provided by the Volunteer Income Tax Assistance (VITA) program? - Answer✔✔-
Free tax return assistance to low- or moderate-income taxpayers.
What benefit is offered when VITA services are combined with credit union programs that encourage
taxpayers to open accounts for direct deposit of tax refunds? - Answer✔✔-Direct deposit reduces the
time required to get a refund, which counters the appeal of refund anticipation loans.
What is the name of the organization that offers free tax assistance to taxpayers age 60 or older, those
with disabilities or special needs, or who qualify for earned income or homestead tax credits? -
Answer✔✔-Tax Counseling for the Elderly (TCE)
What percent of tax payers are eligible to use the "Free File Online" service offered as a partnership
between the IRS and tax software companies? - Answer✔✔-70% are eligible
When members use tax refunds to pay down debts, which debts should be paid first? - Answer✔✔-
Always pay the debts with high interest rates or that could prompt garnishments.
How have education, information, and direct deposit programs impacted taxpayers' use of refund
anticipation loans? - Answer✔✔-The use of refund anticipation loans is decreasing.
Page 2/24
, EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED. FIRST PUBLISH OCTOBER 2024.
What rule of thumb should be used when defining taxable income? - Answer✔✔-If you benefit
financially, you are likely to be taxed for it.
Which type of qualified IRA withdrawal is exempt from income tax? - Answer✔✔-Roth IRA withdrawals
are exempt.
How do different tax authorities treat items excluded from federal taxable income? - Answer✔✔-
Exclusions vary from state to state.
What is the first step for effectively managing income taxes? - Answer✔✔-Determining your filing status.
What should be the goal of managing a taxpayer's income tax withholding? - Answer✔✔-To maintain
cash flow while avoiding a tax bill at filing time.
What happens to year-end balances "left over" in Section 125 plans or health savings accounts (HSAs)? -
Answer✔✔-Section 125 balances are forfeited, while HSA balances are rolled over
How much can a member in the 25% tax bracket save in federal income taxes by depositing pre-tax
income into tax-deferred retirement accounts, such as traditional IRAs? - Answer✔✔-One-fourth of the
deposit.
Which statement accurately describes options for reducing income taxes? - Answer✔✔-Tax exemptions,
deductions, and credits all help reduce income taxes.
Which group of taxpayers usually qualifies for the Earned Income Tax Credit (EITC)? - Answer✔✔-Low-
income families with earned income qualify for the credit.
Page 3/24
FiCEP Final : CUNA Review Study Guide
Select the statement that correctly describes a progressive tax. - Answer✔✔-A progressive tax requires
people to pay more as they earn more.
Pick the statement that best describes a regressive tax. - Answer✔✔-A regressive tax charges the same
tax rate regardless of the taxpayer's income.
Why are government fees and surcharges sometimes described as a form of tax? - Answer✔✔-Because
they generate income for the government.
Which taxing authorities are worthy of the member's attention? - Answer✔✔-The member must attend
to all tax authorities at all levels of government to maintain their financial well-being.
How do taxes impact your personal spending? - Answer✔✔-Taxes can make personal spending go up or
down.
Which is larger: the penalty for failing to pay federal income taxes on time, or the penalty for failing to
file a tax return when taxes are owed? - Answer✔✔-The penalty for failing to file a tax return is
significantly higher.
What is the right attitude to take toward taxes to protect your financial well-being? - Answer✔✔-Taxes
are an essential financial responsibility.
When is the IRS most likely to impose the maximum penalty on taxpayers? - Answer✔✔-When they are
forced to track down the taxpayer.
Page 1/24
,EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED. FIRST PUBLISH OCTOBER 2024.
What is a good rule to follow when dealing with a tax auditor or another issue involving the IRS? -
Answer✔✔-Never assume the IRS is always correct.
What is the financial counselor's role in aiding members with complex tax issues? - Answer✔✔-The
counselor provides basic information and refers members to tax programs or tax experts.
What happens when taxpayers who file a late return for any or all of the 4 most recent tax years are
owed a refund? - Answer✔✔-No penalty is charged and the taxpayer gets the full refund amount.
What tax services are provided by the Volunteer Income Tax Assistance (VITA) program? - Answer✔✔-
Free tax return assistance to low- or moderate-income taxpayers.
What benefit is offered when VITA services are combined with credit union programs that encourage
taxpayers to open accounts for direct deposit of tax refunds? - Answer✔✔-Direct deposit reduces the
time required to get a refund, which counters the appeal of refund anticipation loans.
What is the name of the organization that offers free tax assistance to taxpayers age 60 or older, those
with disabilities or special needs, or who qualify for earned income or homestead tax credits? -
Answer✔✔-Tax Counseling for the Elderly (TCE)
What percent of tax payers are eligible to use the "Free File Online" service offered as a partnership
between the IRS and tax software companies? - Answer✔✔-70% are eligible
When members use tax refunds to pay down debts, which debts should be paid first? - Answer✔✔-
Always pay the debts with high interest rates or that could prompt garnishments.
How have education, information, and direct deposit programs impacted taxpayers' use of refund
anticipation loans? - Answer✔✔-The use of refund anticipation loans is decreasing.
Page 2/24
, EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED. FIRST PUBLISH OCTOBER 2024.
What rule of thumb should be used when defining taxable income? - Answer✔✔-If you benefit
financially, you are likely to be taxed for it.
Which type of qualified IRA withdrawal is exempt from income tax? - Answer✔✔-Roth IRA withdrawals
are exempt.
How do different tax authorities treat items excluded from federal taxable income? - Answer✔✔-
Exclusions vary from state to state.
What is the first step for effectively managing income taxes? - Answer✔✔-Determining your filing status.
What should be the goal of managing a taxpayer's income tax withholding? - Answer✔✔-To maintain
cash flow while avoiding a tax bill at filing time.
What happens to year-end balances "left over" in Section 125 plans or health savings accounts (HSAs)? -
Answer✔✔-Section 125 balances are forfeited, while HSA balances are rolled over
How much can a member in the 25% tax bracket save in federal income taxes by depositing pre-tax
income into tax-deferred retirement accounts, such as traditional IRAs? - Answer✔✔-One-fourth of the
deposit.
Which statement accurately describes options for reducing income taxes? - Answer✔✔-Tax exemptions,
deductions, and credits all help reduce income taxes.
Which group of taxpayers usually qualifies for the Earned Income Tax Credit (EITC)? - Answer✔✔-Low-
income families with earned income qualify for the credit.
Page 3/24
