CFL Midterm Exam Questions with 100%
Correct Answers.
The Social Security tax rate is
6.20%
Employers use which form to compute the amount of federal income tax to withhold?
Form W-4
Gross pay is the amount of pay the employee takes home.
False
Who completes Form W-4?
Employee
The Wage and Tax Statement is also known as
Form W-2.
Interest received on a certificate of deposit (CD) is
taxable.
Interest received on a bond issued by the state of California to fund school buildings is
tax-exempt
Interest received on a loan you made to your business partner is
taxable.
interest received on a bond issued by the city of Austin, Texas, for a redevelopment project
is
tax-exempt.
Interest income is considered
unearned income
, An exemption increases the income that is subject to tax.
False
A taxpayer and his or her spouse can each claim a personal exemption.
True
What type of exemption do taxpayers claim for their infant children?
Dependency.
A taxpayer cannot claim a personal exemption on his or her own tax return when he or she
can be claimed as a dependent on another taxpayer's return.
True
The highest standard deduction amount is associated with the married filing jointly and
qualifying widow(er) with dependent child filing statuses.
True
The lowest standard deduction amount is associated with the single and married filing
separately filing statuses.
True
The standard deduction amount affects the number of exemptions.
False
the higher the standard deduction amount, the lower the taxable income.
True
A taxpayer who can be claimed as a dependent on another taxpayer's return must claim
the standard deduction for his or her filing status.
True
What is the maximum amount the child tax credit allows taxpayers to claim per qualifying
child?
Correct Answers.
The Social Security tax rate is
6.20%
Employers use which form to compute the amount of federal income tax to withhold?
Form W-4
Gross pay is the amount of pay the employee takes home.
False
Who completes Form W-4?
Employee
The Wage and Tax Statement is also known as
Form W-2.
Interest received on a certificate of deposit (CD) is
taxable.
Interest received on a bond issued by the state of California to fund school buildings is
tax-exempt
Interest received on a loan you made to your business partner is
taxable.
interest received on a bond issued by the city of Austin, Texas, for a redevelopment project
is
tax-exempt.
Interest income is considered
unearned income
, An exemption increases the income that is subject to tax.
False
A taxpayer and his or her spouse can each claim a personal exemption.
True
What type of exemption do taxpayers claim for their infant children?
Dependency.
A taxpayer cannot claim a personal exemption on his or her own tax return when he or she
can be claimed as a dependent on another taxpayer's return.
True
The highest standard deduction amount is associated with the married filing jointly and
qualifying widow(er) with dependent child filing statuses.
True
The lowest standard deduction amount is associated with the single and married filing
separately filing statuses.
True
The standard deduction amount affects the number of exemptions.
False
the higher the standard deduction amount, the lower the taxable income.
True
A taxpayer who can be claimed as a dependent on another taxpayer's return must claim
the standard deduction for his or her filing status.
True
What is the maximum amount the child tax credit allows taxpayers to claim per qualifying
child?
