FiCEP Final Review
1. Which statement accurately describes options for reducing income tax-es?: Tax
exemptions, deductions, and credits all help reduce income taxes.
2. Which group of taxpayers usually qualifies for the Earned Income TaxCredit (EITC)?:
Low-income families with earned income qualify for the credit.
3. These six expenses are typically accepted by the IRS as itemized deduc- tions::
Traditional IRA contributions, alimony payments, real estate taxes paid, stateand local income
taxes, mortgage interest, and casualty and theft losses.
4. What is the first step financial counselors can take to determine whether a member is
properly managing their taxes?: Review the member's payroll stub.
5. What is the meaning of the insurance practice "pooling of risks"?: Combin-ing risks among
insurers as well as groups of individuals.
6. What is an insurable interest?: The policyholder's monetary interest in theinsured
property.
7. From the perspective of your financial well-being, what is the best way to decide whether
or not you should insure a particular item?: Consider the riskto your assets.
8. Select the correct description for the "elimination period".: How long aperson must be
disabled before they are eligible for benefits.
9. When does Workers' compensation provide benefits to workers?: When theworker has a
work-related illness or injury.
10. In addition to administrative costs, litigation, and third-party payments,what two factors
have significantly contributed to rising health insurance costs?: The rising cost of medical
technology, as well as the fact that people areliving longer.
11. How did the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 impact
employee health benefits?: It gave employees the right to retainhealth insurance after their job
ends by paying the full premium.
12. If a member decides to purchase long-term care insurance, when is the best time to obtain
a policy?: Sign up while they are still in good health so carrierswill accept you.
13. What types of insurance policies should be avoided by most members?-
: Policies which offer coverage only in very specific conditions, making it hard toqualify for
benefits.
14. Which group of people is most likely to purchase HO-4, or "contentscoverage"?: Renters
15. How can a policyholder obtain additional insurance protection for itemssuch as antiques
or guns that might otherwise have only limited insurancereimbursement for theft or loss due
to policy limits?: Purchase a schedule policy rider, or "schedule" the items.
16. What is a possible consequence of ignoring exclusions to homeowner'spolicy?: The
, policy may not pay for a claim.
17. Under standard property insurance plans, how much of the cost of replac-ing property is
typically covered?: 80%
18. Who is eligible to participate in the federal government's National Flood In- surance
Program?: Homeowners in participating communities that are susceptibleto floods.
19. Which statement best defines comprehensive and collision insurance coverage for
vehicles?: Collision is for accidents and comprehensive is for otherforms of damage and theft.
20. Which factors can impact the cost of vehicle insurance?: The driver's ageand gender, as
well as the deductible amount.
21. Select the statement that correctly describes a progressive tax.: A progres-sive tax
requires people to pay more as they earn more.
22. Pick the statement that best describes a regressive tax.: A regressive taxcharges the same
tax rate regardless of the taxpayer's income.
23. Why are government fees and surcharges sometimes described as a formof tax?: Because
they generate income for the government.
24. Which taxing authorities are worthy of the member's attention?: The mem-ber must
attend to all tax authorities at all levels of government to maintain their financial well-being.
25. How do taxes impact your personal spending?: Taxes can make personalspending go up
or down.
26. 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?: The penalty for failing to file a tax return is
significantly higher.
27. What is the right attitude to take toward taxes to protect your financialwell-being?: Taxes
are an essential financial responsibility.
28. When is the IRS most likely to impose the maximum penalty on taxpayers?-
: When they are forced to track down the taxpayer.
29. What is a good rule to follow when dealing with a tax auditor or anotherissue involving
the IRS?: Never assume the IRS is always correct.
30. What is the financial counselor's role in aiding members with complex tax issues?: The
counselor provides basic information and refers members to taxprograms or tax experts.
31. What happens when taxpayers who file a late return for any or all of the 4 most recent tax
years are owed a refund?: No penalty is charged and the taxpayergets the full refund amount.
32. What tax services are provided by the Volunteer Income Tax Assistance (VITA)
program?: Free tax return assistance to low- or moderate-income taxpayers.
33. 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?: Direct deposit reduces
the time required to get a refund, which countersthe appeal of refund anticipation loans.
1. Which statement accurately describes options for reducing income tax-es?: Tax
exemptions, deductions, and credits all help reduce income taxes.
2. Which group of taxpayers usually qualifies for the Earned Income TaxCredit (EITC)?:
Low-income families with earned income qualify for the credit.
3. These six expenses are typically accepted by the IRS as itemized deduc- tions::
Traditional IRA contributions, alimony payments, real estate taxes paid, stateand local income
taxes, mortgage interest, and casualty and theft losses.
4. What is the first step financial counselors can take to determine whether a member is
properly managing their taxes?: Review the member's payroll stub.
5. What is the meaning of the insurance practice "pooling of risks"?: Combin-ing risks among
insurers as well as groups of individuals.
6. What is an insurable interest?: The policyholder's monetary interest in theinsured
property.
7. From the perspective of your financial well-being, what is the best way to decide whether
or not you should insure a particular item?: Consider the riskto your assets.
8. Select the correct description for the "elimination period".: How long aperson must be
disabled before they are eligible for benefits.
9. When does Workers' compensation provide benefits to workers?: When theworker has a
work-related illness or injury.
10. In addition to administrative costs, litigation, and third-party payments,what two factors
have significantly contributed to rising health insurance costs?: The rising cost of medical
technology, as well as the fact that people areliving longer.
11. How did the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 impact
employee health benefits?: It gave employees the right to retainhealth insurance after their job
ends by paying the full premium.
12. If a member decides to purchase long-term care insurance, when is the best time to obtain
a policy?: Sign up while they are still in good health so carrierswill accept you.
13. What types of insurance policies should be avoided by most members?-
: Policies which offer coverage only in very specific conditions, making it hard toqualify for
benefits.
14. Which group of people is most likely to purchase HO-4, or "contentscoverage"?: Renters
15. How can a policyholder obtain additional insurance protection for itemssuch as antiques
or guns that might otherwise have only limited insurancereimbursement for theft or loss due
to policy limits?: Purchase a schedule policy rider, or "schedule" the items.
16. What is a possible consequence of ignoring exclusions to homeowner'spolicy?: The
, policy may not pay for a claim.
17. Under standard property insurance plans, how much of the cost of replac-ing property is
typically covered?: 80%
18. Who is eligible to participate in the federal government's National Flood In- surance
Program?: Homeowners in participating communities that are susceptibleto floods.
19. Which statement best defines comprehensive and collision insurance coverage for
vehicles?: Collision is for accidents and comprehensive is for otherforms of damage and theft.
20. Which factors can impact the cost of vehicle insurance?: The driver's ageand gender, as
well as the deductible amount.
21. Select the statement that correctly describes a progressive tax.: A progres-sive tax
requires people to pay more as they earn more.
22. Pick the statement that best describes a regressive tax.: A regressive taxcharges the same
tax rate regardless of the taxpayer's income.
23. Why are government fees and surcharges sometimes described as a formof tax?: Because
they generate income for the government.
24. Which taxing authorities are worthy of the member's attention?: The mem-ber must
attend to all tax authorities at all levels of government to maintain their financial well-being.
25. How do taxes impact your personal spending?: Taxes can make personalspending go up
or down.
26. 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?: The penalty for failing to file a tax return is
significantly higher.
27. What is the right attitude to take toward taxes to protect your financialwell-being?: Taxes
are an essential financial responsibility.
28. When is the IRS most likely to impose the maximum penalty on taxpayers?-
: When they are forced to track down the taxpayer.
29. What is a good rule to follow when dealing with a tax auditor or anotherissue involving
the IRS?: Never assume the IRS is always correct.
30. What is the financial counselor's role in aiding members with complex tax issues?: The
counselor provides basic information and refers members to taxprograms or tax experts.
31. What happens when taxpayers who file a late return for any or all of the 4 most recent tax
years are owed a refund?: No penalty is charged and the taxpayergets the full refund amount.
32. What tax services are provided by the Volunteer Income Tax Assistance (VITA)
program?: Free tax return assistance to low- or moderate-income taxpayers.
33. 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?: Direct deposit reduces
the time required to get a refund, which countersthe appeal of refund anticipation loans.
