FiCEP Final - CUNA Review QUESTIONS |\ |\ |\ |\ |\ |\
WITH ANSWERS |\
Select the statement that correctly describes a
|\ |\ |\ |\ |\ |\ |\
progressive tax. - CORRECT ANSWERS ✔✔A progressive |\ |\ |\ |\ |\ |\ |\
tax requires people to pay more as they earn more.
|\ |\ |\ |\ |\ |\ |\ |\ |\
Pick the statement that best describes a regressive tax. -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔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? - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔Because they generate income for the government. |\ |\ |\ |\ |\ |\
Which taxing authorities are worthy of the member's
|\ |\ |\ |\ |\ |\ |\ |\
attention? - CORRECT ANSWERS ✔✔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? - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔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? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔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? - CORRECT ANSWERS ✔✔Taxes
|\ |\ |\ |\ |\ |\ |\
are an essential financial responsibility.
|\ |\ |\ |\
When is the IRS most likely to impose the maximum
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
penalty on taxpayers? - CORRECT ANSWERS ✔✔When
|\ |\ |\ |\ |\ |\ |\
they are forced to track down the taxpayer.
|\ |\ |\ |\ |\ |\ |\
What is a good rule to follow when dealing with a tax
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
auditor or another issue involving the IRS? - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Never assume the IRS is always correct. |\ |\ |\ |\ |\ |\ |\
What is the financial counselor's role in aiding members
|\ |\ |\ |\ |\ |\ |\ |\ |\
with complex tax issues? - CORRECT ANSWERS ✔✔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? - CORRECT ANSWERS ✔✔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? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\
✔✔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? -
|\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔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? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\
✔✔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? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\
✔✔70% are eligible |\ |\
, When members use tax refunds to pay down debts, which
|\ |\ |\ |\ |\ |\ |\ |\ |\
debts should be paid first? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔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? - CORRECT ANSWERS ✔✔The use of refund
|\ |\ |\ |\ |\ |\ |\ |\
anticipation loans is decreasing. |\ |\ |\
What rule of thumb should be used when defining taxable
|\ |\ |\ |\ |\ |\ |\ |\ |\
income? - CORRECT ANSWERS ✔✔If you benefit
|\ |\ |\ |\ |\ |\ |\ |\
financially, you are likely to be taxed for it. |\ |\ |\ |\ |\ |\ |\ |\
Which type of qualified IRA withdrawal is exempt from
|\ |\ |\ |\ |\ |\ |\ |\ |\
income tax? - CORRECT ANSWERS ✔✔Roth IRA
|\ |\ |\ |\ |\ |\ |\
withdrawals are exempt. |\ |\
How do different tax authorities treat items excluded from
|\ |\ |\ |\ |\ |\ |\ |\
federal taxable income? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\
✔✔Exclusions vary from state to state. |\ |\ |\ |\ |\
What is the first step for effectively managing income
|\ |\ |\ |\ |\ |\ |\ |\ |\
taxes? - CORRECT ANSWERS ✔✔Determining your filing
|\ |\ |\ |\ |\ |\ |\
status.
WITH ANSWERS |\
Select the statement that correctly describes a
|\ |\ |\ |\ |\ |\ |\
progressive tax. - CORRECT ANSWERS ✔✔A progressive |\ |\ |\ |\ |\ |\ |\
tax requires people to pay more as they earn more.
|\ |\ |\ |\ |\ |\ |\ |\ |\
Pick the statement that best describes a regressive tax. -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔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? - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔Because they generate income for the government. |\ |\ |\ |\ |\ |\
Which taxing authorities are worthy of the member's
|\ |\ |\ |\ |\ |\ |\ |\
attention? - CORRECT ANSWERS ✔✔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? - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔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? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔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? - CORRECT ANSWERS ✔✔Taxes
|\ |\ |\ |\ |\ |\ |\
are an essential financial responsibility.
|\ |\ |\ |\
When is the IRS most likely to impose the maximum
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
penalty on taxpayers? - CORRECT ANSWERS ✔✔When
|\ |\ |\ |\ |\ |\ |\
they are forced to track down the taxpayer.
|\ |\ |\ |\ |\ |\ |\
What is a good rule to follow when dealing with a tax
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
auditor or another issue involving the IRS? - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Never assume the IRS is always correct. |\ |\ |\ |\ |\ |\ |\
What is the financial counselor's role in aiding members
|\ |\ |\ |\ |\ |\ |\ |\ |\
with complex tax issues? - CORRECT ANSWERS ✔✔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? - CORRECT ANSWERS ✔✔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? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\
✔✔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? -
|\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔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? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\
✔✔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? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\
✔✔70% are eligible |\ |\
, When members use tax refunds to pay down debts, which
|\ |\ |\ |\ |\ |\ |\ |\ |\
debts should be paid first? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔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? - CORRECT ANSWERS ✔✔The use of refund
|\ |\ |\ |\ |\ |\ |\ |\
anticipation loans is decreasing. |\ |\ |\
What rule of thumb should be used when defining taxable
|\ |\ |\ |\ |\ |\ |\ |\ |\
income? - CORRECT ANSWERS ✔✔If you benefit
|\ |\ |\ |\ |\ |\ |\ |\
financially, you are likely to be taxed for it. |\ |\ |\ |\ |\ |\ |\ |\
Which type of qualified IRA withdrawal is exempt from
|\ |\ |\ |\ |\ |\ |\ |\ |\
income tax? - CORRECT ANSWERS ✔✔Roth IRA
|\ |\ |\ |\ |\ |\ |\
withdrawals are exempt. |\ |\
How do different tax authorities treat items excluded from
|\ |\ |\ |\ |\ |\ |\ |\
federal taxable income? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\
✔✔Exclusions vary from state to state. |\ |\ |\ |\ |\
What is the first step for effectively managing income
|\ |\ |\ |\ |\ |\ |\ |\ |\
taxes? - CORRECT ANSWERS ✔✔Determining your filing
|\ |\ |\ |\ |\ |\ |\
status.
