FiCEP Final - CUNA Review QUESTIONS WITH ANSWERS,

FiCEP Final - CUNA Review QUESTIONS |\ |\ |\ |\ |\ |\




WITH ANSWERS |\




Select the statement that correctly describes a
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progressive tax. - CORRECT ANSWERS ✔✔A progressive |\ |\ |\ |\ |\ |\ |\



tax requires people to pay more as they earn more.
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Pick the statement that best describes a regressive tax. -
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CORRECT ANSWERS ✔✔A regressive tax charges the |\ |\ |\ |\ |\ |\ |\



same tax rate regardless of the taxpayer's income.
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Why are government fees and surcharges sometimes
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described as a form of tax? - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\ |\ |\



✔✔Because they generate income for the government. |\ |\ |\ |\ |\ |\




Which taxing authorities are worthy of the member's
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attention? - CORRECT ANSWERS ✔✔The member must |\ |\ |\ |\ |\ |\ |\



attend to all tax authorities at all levels of government to
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maintain their financial well-being. |\ |\ |\




How do taxes impact your personal spending? - CORRECT
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ANSWERS ✔✔Taxes can make personal spending go up or
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down.
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,Which is larger: the penalty for failing to pay federal
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income taxes on time, or the penalty for failing to file a
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tax return when taxes are owed? - CORRECT ANSWERS
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✔✔The penalty for failing to file a tax return is
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significantly higher. |\




What is the right attitude to take toward taxes to protect
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your financial well-being? - CORRECT ANSWERS ✔✔Taxes
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are an essential financial responsibility.
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When is the IRS most likely to impose the maximum
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penalty on taxpayers? - CORRECT ANSWERS ✔✔When
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they are forced to track down the taxpayer.
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What is a good rule to follow when dealing with a tax
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auditor or another issue involving the IRS? - CORRECT
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ANSWERS ✔✔Never assume the IRS is always correct. |\ |\ |\ |\ |\ |\ |\




What is the financial counselor's role in aiding members
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with complex tax issues? - CORRECT ANSWERS ✔✔The
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counselor provides basic information and refers members |\ |\ |\ |\ |\ |\ |\



to tax programs or tax experts.
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What happens when taxpayers who file a late return for
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any or all of the 4 most recent tax years are owed a
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,refund? - CORRECT ANSWERS ✔✔No penalty is charged
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and the taxpayer gets the full refund amount.
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What tax services are provided by the Volunteer Income
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Tax Assistance (VITA) program? - CORRECT ANSWERS
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✔✔Free tax return assistance to low- or moderate-income
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taxpayers.


What benefit is offered when VITA services are combined
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with credit union programs that encourage taxpayers to
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open accounts for direct deposit of tax refunds? -
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CORRECT ANSWERS ✔✔Direct deposit reduces the time|\ |\ |\ |\ |\ |\ |\



required to get a refund, which counters the appeal of
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refund anticipation loans.
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What is the name of the organization that offers free tax
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assistance to taxpayers age 60 or older, those with |\ |\ |\ |\ |\ |\ |\ |\ |\



disabilities or special needs, or who qualify for earned
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income or homestead tax credits? - CORRECT ANSWERS
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✔✔Tax Counseling for the Elderly (TCE)
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What percent of tax payers are eligible to use the "Free
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File Online" service offered as a partnership between the
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IRS and tax software companies? - CORRECT ANSWERS
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✔✔70% are eligible |\ |\

, When members use tax refunds to pay down debts, which
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debts should be paid first? - CORRECT ANSWERS
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✔✔Always pay the debts with high interest rates or that
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could prompt garnishments.
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How have education, information, and direct deposit
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programs impacted taxpayers' use of refund anticipation
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loans? - CORRECT ANSWERS ✔✔The use of refund
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anticipation loans is decreasing. |\ |\ |\




What rule of thumb should be used when defining taxable
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income? - CORRECT ANSWERS ✔✔If you benefit
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financially, you are likely to be taxed for it. |\ |\ |\ |\ |\ |\ |\ |\




Which type of qualified IRA withdrawal is exempt from
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income tax? - CORRECT ANSWERS ✔✔Roth IRA
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withdrawals are exempt. |\ |\




How do different tax authorities treat items excluded from
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federal taxable income? - CORRECT ANSWERS
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✔✔Exclusions vary from state to state. |\ |\ |\ |\ |\




What is the first step for effectively managing income
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taxes? - CORRECT ANSWERS ✔✔Determining your filing
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status.