FHCE 3200 EXAM #2 STUDY GUIDE
UPDATED ACTUAL Exam Questions and
CORECT Answers
Flat tax - CORRECT ANSWER everyone pays the same rate
regressive tax - CORRECT ANSWER low income earners pay a larger proportion of their
incomes in taxes relative to high-income households
Progressive tax - CORRECT ANSWER those with more income pay increasingly higher
taxes, high-income earners pay a disproportionately larger amount of taxes
different types of taxes - CORRECT ANSWER •Federal income taxes
•State income taxes (where applicable)
•Payroll taxes
•Sales taxes
•Property taxes
form 1040EZ - CORRECT ANSWER simplified tax form for
•single or married-filing-jointly
•income reported from wages or salaries
•standard deduction use
•no dependents
form 1040A - CORRECT ANSWER more complicated than form 1040EZ
•allows other types of income reported (such as tips, interest, dividends, and scholarships)
•allows the taxpayer to claim more deductions and tax credits
, form 1040 - CORRECT ANSWER standard tax form everyone can use
•used by the highest-earning households
•also used by households with modest incomes
single - CORRECT ANSWER -not married
-no dependent children or relatives
married filing jointly - CORRECT ANSWER -must be legally married on last day of the year
married filing separately - CORRECT ANSWER must be legally married and choose to file
separately
head of household - CORRECT ANSWER not married, support at least one qualifying
dependent
surviving spouse with dependent children - CORRECT ANSWER spouse died within 3
previous years and have not remarried, support at least one qualifying child
marginal tax rate - CORRECT ANSWER rate of change in tax resulting from a change in
income or deduction, also defined as the tax rate applied on the last dollar earned.
effective tax rate (average tax rate) - CORRECT ANSWER measures the average tax an
individual pays on his or her entire income
capital gain income - CORRECT ANSWER produced from owning capital assets: things you
own for investment or personal use
•Stocks
•Mutual funds
•Coin collections
UPDATED ACTUAL Exam Questions and
CORECT Answers
Flat tax - CORRECT ANSWER everyone pays the same rate
regressive tax - CORRECT ANSWER low income earners pay a larger proportion of their
incomes in taxes relative to high-income households
Progressive tax - CORRECT ANSWER those with more income pay increasingly higher
taxes, high-income earners pay a disproportionately larger amount of taxes
different types of taxes - CORRECT ANSWER •Federal income taxes
•State income taxes (where applicable)
•Payroll taxes
•Sales taxes
•Property taxes
form 1040EZ - CORRECT ANSWER simplified tax form for
•single or married-filing-jointly
•income reported from wages or salaries
•standard deduction use
•no dependents
form 1040A - CORRECT ANSWER more complicated than form 1040EZ
•allows other types of income reported (such as tips, interest, dividends, and scholarships)
•allows the taxpayer to claim more deductions and tax credits
, form 1040 - CORRECT ANSWER standard tax form everyone can use
•used by the highest-earning households
•also used by households with modest incomes
single - CORRECT ANSWER -not married
-no dependent children or relatives
married filing jointly - CORRECT ANSWER -must be legally married on last day of the year
married filing separately - CORRECT ANSWER must be legally married and choose to file
separately
head of household - CORRECT ANSWER not married, support at least one qualifying
dependent
surviving spouse with dependent children - CORRECT ANSWER spouse died within 3
previous years and have not remarried, support at least one qualifying child
marginal tax rate - CORRECT ANSWER rate of change in tax resulting from a change in
income or deduction, also defined as the tax rate applied on the last dollar earned.
effective tax rate (average tax rate) - CORRECT ANSWER measures the average tax an
individual pays on his or her entire income
capital gain income - CORRECT ANSWER produced from owning capital assets: things you
own for investment or personal use
•Stocks
•Mutual funds
•Coin collections
