In: Economics
Question 1:
Some political leaders would like to reduce the number of marginal tax brackets, but how many federal income tax brackets are there today?
1
9
5
3
7
Question 2:
All of the following “adjustments” are commonly subtracted from a person’s total income (up to certain limits) and therefore are not included in a person’s adjusted gross income EXCEPT:
Contributions to IRAs (Individual Retirements Accounts)
Penalties for early withdrawal of savings
Mortgage interest paid
Student loan interest
Moving expenses to take a new job
Question 3:
There is an income threshold below which a person (or multi-person household) does not have to pay any federal income tax at all doesn’t even have to file a tax return. This amount, which can change a little from year to year, is not an arbitrary number. This number, which was $10,350 in 2016, represents which of the following:
Alternative minimum threshold
Poverty line
Personal exemption
Standard deduction
Personal exemption + standard deduction
Question 4:
Suppose that you are 50 years old and are involved in an
accident. You have some basic health insurance, but you end up
having to pay $30,000 in medical bills yourself (out of your own
pocket). If your adjusted gross income if $100,000 and your
itemized your deductions, how much, if anything, of your medical
expenses can you include with your itemized deductions?
All $30,000
$20,000
$15,000
$10,000
$0
Question 1
Some political leaders would like to reduce the number of marginal tax brackets, but how many federal income tax brackets are there today -
Answer- The Federal income tax has 7 brackets, 10%, 15%, 25%, 28%, 33%, 35% & 39.6%.
Question - 2
All of the following “adjustments” are commonly subtracted from a person’s total income (up to certain limits) and therefore are not included in a person’s adjusted gross income EXCEPT:
Answer – Mortgage interest paid
It is deducted as an itemized deduction on the return. But if the gross income is $109,000 or more then this deduction is not allowed.
Question - 3
There is an income threshold below which a person (or multi-person household) does not have to pay any federal income tax at all doesn’t even have to file a tax return. This amount, which can change a little from year to year, is not an arbitrary number. This number, which was $10,350 in 2016, represents which of the following:
Answer – Personal Exemption + Standard deduction
The personal exemption is $4050 and the standard deduction is $6300. Hence this number is $10,350 , then it must include both personal exemption and standard deduction.
Question 4
Suppose that you are 50 years old and are involved in an accident. You have some basic health insurance, but you end up having to pay $30,000 in medical bills yourself (out of your own pocket). If your adjusted gross income if $100,000 and your itemized your deductions, how much, if anything, of your medical expenses can you include with your itemized deductions?
Answer - $20000
Itemized deductions cannot be reduced by more than 80% .