FICEP STUDY SHEET RESOURCES 2026
VERIFIED SOLUTIONS READY
⫸ Pick the statement that best describes a regressive tax. Answer: 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? Answer: Because they generate income for the
government.
⫸ Which taxing authorities are worthy of the member's attention?
Answer: 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? Answer: 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? Answer: 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? Answer: Taxes are an essential financial
responsibility.
,⫸ When is the IRS most likely to impose the maximum penalty on
taxpayers? Answer: 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? Answer: Never assume the IRS is
always correct.
⫸ What is the financial counselor's role in aiding members with
complex tax issues? Answer: 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? Answer: 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? Answer: 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? Answer: 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? Answer:
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? Answer: 70% are eligible
⫸ When members use tax refunds to pay down debts, which debts
should be paid first? Answer: 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? Answer: The
use of refund anticipation loans is decreasing.
⫸ What rule of thumb should be used when defining taxable
income? Answer: If you benefit financially, you are likely to be taxed
for it.
⫸ Which type of qualified IRA withdrawal is exempt from income
tax? Answer: Roth IRA withdrawals are exempt.
⫸ How do different tax authorities treat items excluded from federal
taxable income? Answer: Exclusions vary from state to state.
⫸ What is the first step for effectively managing income taxes?
Answer: Determining your filing status.
, ⫸ What should be the goal of managing a taxpayer's income tax
withholding? Answer: To maintain cash flow while avoiding a tax
bill at filing time.
⫸ What happens to year-end balances "left over" in Section 125
plans or health savings accounts (HSAs)? Answer: Section 125
balances are forfeited, while HSA balances are rolled over
⫸ How much can a member in the 25% tax bracket save in federal
income taxes by depositing pre-tax income into tax-deferred
retirement accounts, such as traditional IRAs? Answer: One-fourth of
the deposit.
⫸ Which statement accurately describes options for reducing income
taxes? Answer: Tax exemptions, deductions, and credits all help
reduce income taxes.
⫸ Which group of taxpayers usually qualifies for the Earned Income
Tax Credit (EITC)? Answer: Low-income families with earned
income qualify for the credit.
⫸ These six expenses are typically accepted by the IRS as itemized
deductions: Answer: Traditional IRA contributions, alimony
payments, real estate taxes paid, state and local income taxes,
mortgage interest, and casualty and theft losses.
VERIFIED SOLUTIONS READY
⫸ Pick the statement that best describes a regressive tax. Answer: 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? Answer: Because they generate income for the
government.
⫸ Which taxing authorities are worthy of the member's attention?
Answer: 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? Answer: 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? Answer: 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? Answer: Taxes are an essential financial
responsibility.
,⫸ When is the IRS most likely to impose the maximum penalty on
taxpayers? Answer: 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? Answer: Never assume the IRS is
always correct.
⫸ What is the financial counselor's role in aiding members with
complex tax issues? Answer: 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? Answer: 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? Answer: 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? Answer: 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? Answer:
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? Answer: 70% are eligible
⫸ When members use tax refunds to pay down debts, which debts
should be paid first? Answer: 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? Answer: The
use of refund anticipation loans is decreasing.
⫸ What rule of thumb should be used when defining taxable
income? Answer: If you benefit financially, you are likely to be taxed
for it.
⫸ Which type of qualified IRA withdrawal is exempt from income
tax? Answer: Roth IRA withdrawals are exempt.
⫸ How do different tax authorities treat items excluded from federal
taxable income? Answer: Exclusions vary from state to state.
⫸ What is the first step for effectively managing income taxes?
Answer: Determining your filing status.
, ⫸ What should be the goal of managing a taxpayer's income tax
withholding? Answer: To maintain cash flow while avoiding a tax
bill at filing time.
⫸ What happens to year-end balances "left over" in Section 125
plans or health savings accounts (HSAs)? Answer: Section 125
balances are forfeited, while HSA balances are rolled over
⫸ How much can a member in the 25% tax bracket save in federal
income taxes by depositing pre-tax income into tax-deferred
retirement accounts, such as traditional IRAs? Answer: One-fourth of
the deposit.
⫸ Which statement accurately describes options for reducing income
taxes? Answer: Tax exemptions, deductions, and credits all help
reduce income taxes.
⫸ Which group of taxpayers usually qualifies for the Earned Income
Tax Credit (EITC)? Answer: Low-income families with earned
income qualify for the credit.
⫸ These six expenses are typically accepted by the IRS as itemized
deductions: Answer: Traditional IRA contributions, alimony
payments, real estate taxes paid, state and local income taxes,
mortgage interest, and casualty and theft losses.
