Writing it Off: Test Your Income Tax Knowledge

Writing it Off: Test Your Income Tax Knowledge
Image: Getty Images, Elizabeth Simpson

About This Quiz

Whether you're a tax whiz or you farm your return out to the professionals, it's good to know a bit about how to file your taxes. Test your income tax know-how in this quiz.
What is Adjusted Gross Income?
your after-tax income
your taxable income after deductions
your taxable income before deductions
Your Adjusted Gross Income (AGI) is your taxable income before deductions. It includes your gross income like salary and investment interest, minus adjustments that aren't taxed like money you get from interest on retirement plans or alimony.

Advertisement

What is a progressive income tax system?
a tax system that allows deductions on investments
a tax system that taxes higher income at higher rates and lower income at lower rates
A progressive income tax system is one in which tax rates increase progressively as income increases.
a tax system that gets better as time goes on

Advertisement

Which of the following doesn't count as an itemized deduction on your income tax?
the cost of utilities like water and gas
The cost of utilities isn't tax deductable. You can, however, get deductions for unexpected loss of property due to theft or natural disaster. You can even deduct gambling losses up to the amount of your gambling winnings.
theft losses
gambling losses

Advertisement

Which of the following isn't a good reason to file a tax amendment?
You made a mathematical error.
Don't file a tax return amendment, form 1040X, if you discover an addition or subtraction error you made on your 1040. The IRS will check your math. And, they'll notify you if a mathematical error results in a change to your taxes.
You put down the wrong filing status.
You forgot to count someone as a dependent.

Advertisement

Which form tells your employer all they need to know about your tax-related allowance information?
W-2
W-4
The W-4 form lists all of your withholding allowance information like the number of dependents and child care expenses. This tells your employer how much money to withhold from your paycheck for federal income tax. Toward the end of the tax year, your company sends you a W-2 form which details how much money you've made during the last year and how much federal tax was withheld from your income.
W-10

Advertisement

It was unconstitutional for the U.S. government to levy an income tax before the passage of which amendment?
14th Amendment
16th Amendment
The 16th Amendment, passed in 1913, allowed the federal government to collect taxes on income.
18th Amendment

Advertisement

The proposed Fair Tax would change the U.S. tax system and instead:
institute a national sales tax
The Fair Tax Plan would abolish the income tax and instead institute a national sales tax.
institute a single income tax rate for all taxpayers
would only tax the rich

Advertisement

Which of the following may increase your chances of getting audited?
a clean and clearly filled out tax return
a mathematical mistake on your tax return
Watch your figures -- mathematical errors look bad and could increase the likelihood you'll be targeted for an audit. A clearly filled-out return and explanatory notes will help you avoid an audit.
sending explanatory notes and receipts before the IRS asks for them

Advertisement

If you sell your old Chevrolet for more than you paid, the profit is subject to:
no taxation
capital gains tax
If you sell something for more than you paid for it, it's subject to capital gains tax. The capital gains tax takes a percentage of all realized (sold) capital gains.
seller's tax

Advertisement

Which of the following is not a way to lower the amount you pay in capital gains taxes?
deducting capital losses from your capital gains
taking advantage of short-term rather than long-term investments
The simplest strategy for lowering the amount you owe in capital gains tax is to avoid short-term investments. Long-term investments will almost always have a lower tax rate. You can also deduct capital losses from your capital gains to lower your total taxable earnings.
taking advantage of long-term rather than short-term investments

Advertisement

What is the “three of five” test?
a test to ensure your small business is legit
When claiming your small business, the IRS expects a profit. If your business was profitable in at least three out of the past five years, you should avoid audits.
a test to avoid paying taxes
a test to find deductions

Advertisement

Which of the following are NOT needed at the tax preparer’s office?
paystub
medical expenses
rental agreement/lease
When going to prepare your taxes, be sure to take all relevant documents including, identification, proof of expenses, and proof of income. Rental agreements are not necessary.

Advertisement

What is the deadline for filing tax forms?
April 1
April 15
April 15 equals doomsday for many Americans. Don’t fret! You may get an extra day or two if the 15th falls on the weekend.
April 30

Advertisement

What year was the Office of Commissioner of Internal Revenue established?
1860
1862
The Tax Act of 1862 gave the commissioner the power to levy and collect taxes.
1865

Advertisement

What does IRS stand for?
International Revenue Service
Internal Revenue Service
The IRS is the Internal Revenue Service.
Income Revenue Service

Advertisement

How many tax brackets are used in the United States?
six
The United States uses a marginal tax rate and uses six tax brackets.
10
12

Advertisement

What form do you use to file for an extension?
1040
W-4
4868
If April 15th is fast approaching and you are not prepared to file your taxes, use Form 4868 to file for an extension.

Advertisement

Which of the following is NOT an itemized deduction that can be included in your taxes?
state and local income or sales tax paid
charity
tax penalties
There are a number of tax deductible expenses; however interest and penalties paid on taxes cannot be deducted.

Advertisement

What is a flat tax?
a tax percentage that depends on how much money you make.
a national sales tax
fixed percentage of income
A flat tax is where everyone pays the same percentage on their taxes regaradless of income.

Advertisement

How many states in the United States that do not have an individual income tax?
20
nine
seven
Seven states -- Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming -- have no income tax.

Advertisement

You Got:
/20
Getty Images, Elizabeth Simpson
Friends Quiz: Can You Remember These Obscure Details From Friends?
Friends Quiz: Can You Remember These Obscure Details From Friends?
If you consider yourself to be a huge "Friends" fan, then this is the quiz for you! Test your knowledge of the show by seeing if you can remember all these obscure little details from the series!
Explore More

Featured