Indicate whether the statement is true or false. 22. The gross income minus the
ID: 2545535 • Letter: I
Question
Indicate whether the statement is true or false. 22. The gross income minus the tax exempt income equals the adjusted gross income. a. True b. False 23. Qualified dividends are taxed at the highest capital gain rates. a. True b. False 24. Russ and Lois got married on December 30. Even though they were single for most part of the year, they can legally file as married taxpayers in the year of the wedding. a. True b. False 25. A married couple filing a joint return has Ms. Cindy Cook, a CPA, complete their return. The IRS will hold only Ms. Cook responsible for any errors on the return. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 26. Which of the following is subject to federal income tax? a. The tax credit earnings on a Roth IRA b. Municipal bond interest c. Child care support d. Alimony received e. Personal exemptions 27. You would typically include _____ in your gross income. a. child support payment b. life insurance death benefit payments c. municipal bond interest d. income from pensions e. personal exemptions 28. If you do not wish to itemize deductions, you can use the: a. pay-as-you-go amount. b. bracket deduction. c. standard deduction. d. exemption. e. withholding allowance. Indicate whether the statement is true or false. 29. Cash is the only kind of liquid asset. a. True b. False 30. Debit cards are a form of EFTS. a. True b. False 31. Your savings will grow faster with monthly interest compounding than with quarterly interest compounding for a given nominal interest rate. a. True b. False 32. Today, you can hold an account with a mutual fund that allows you to write a limited number of checks. a. True b. False 33. Nondepository institutions are referred to as banks. a. True b. False 34. Compound interest means that a savings account earns interest on the interest previously earned. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 35. You have $450 in your checking account when your ATM card and PIN are stolen. You could lose up to _____ if you report the lost ATM card within 2 business days. a. $0 b. $25 c. $50 d. $450 e. $500 36. Mary has calculated her adjusted balance as $500. She notices that her bank's service charges are $20 for this period. Mary's ending balance is _____. a. $520 b. $480 c. $600 d. $500 e. $510 37. At maturity, a deposit of $6,000 in certificates of deposit (CD) for 10 years at 3% will be worth: (Select the closest answer.) a. $7,340. b. $7,800. c. $8,060. d. $8,678. e. $9,005. 38. John Anderson deposited $10,000 in certificates of deposit (CD) for 3 years at 5%. At maturity, it will be worth: (Use time value tables or a financial calculator. Select the closest answer.) a. $10,500. b. $10,725. c. $11,400. d. $11,580. e. $12,400. Enter the appropriate word(s) to complete the statement. 39. People who do not have checking accounts often use _________. A. a cashier's check B. overdraft protection C. a debit card D. the checkbook ledger Indicate whether the statement is true or false. 22. The gross income minus the tax exempt income equals the adjusted gross income. a. True b. False 23. Qualified dividends are taxed at the highest capital gain rates. a. True b. False 24. Russ and Lois got married on December 30. Even though they were single for most part of the year, they can legally file as married taxpayers in the year of the wedding. a. True b. False 25. A married couple filing a joint return has Ms. Cindy Cook, a CPA, complete their return. The IRS will hold only Ms. Cook responsible for any errors on the return. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 26. Which of the following is subject to federal income tax? a. The tax credit earnings on a Roth IRA b. Municipal bond interest c. Child care support d. Alimony received e. Personal exemptions 27. You would typically include _____ in your gross income. a. child support payment b. life insurance death benefit payments c. municipal bond interest d. income from pensions e. personal exemptions 28. If you do not wish to itemize deductions, you can use the: a. pay-as-you-go amount. b. bracket deduction. c. standard deduction. d. exemption. e. withholding allowance. Indicate whether the statement is true or false. 29. Cash is the only kind of liquid asset. a. True b. False 30. Debit cards are a form of EFTS. a. True b. False 31. Your savings will grow faster with monthly interest compounding than with quarterly interest compounding for a given nominal interest rate. a. True b. False 32. Today, you can hold an account with a mutual fund that allows you to write a limited number of checks. a. True b. False 33. Nondepository institutions are referred to as banks. a. True b. False 34. Compound interest means that a savings account earns interest on the interest previously earned. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 35. You have $450 in your checking account when your ATM card and PIN are stolen. You could lose up to _____ if you report the lost ATM card within 2 business days. a. $0 b. $25 c. $50 d. $450 e. $500 36. Mary has calculated her adjusted balance as $500. She notices that her bank's service charges are $20 for this period. Mary's ending balance is _____. a. $520 b. $480 c. $600 d. $500 e. $510 37. At maturity, a deposit of $6,000 in certificates of deposit (CD) for 10 years at 3% will be worth: (Select the closest answer.) a. $7,340. b. $7,800. c. $8,060. d. $8,678. e. $9,005. 38. John Anderson deposited $10,000 in certificates of deposit (CD) for 3 years at 5%. At maturity, it will be worth: (Use time value tables or a financial calculator. Select the closest answer.) a. $10,500. b. $10,725. c. $11,400. d. $11,580. e. $12,400. Enter the appropriate word(s) to complete the statement. 39. People who do not have checking accounts often use _________. A. a cashier's check B. overdraft protection C. a debit card D. the checkbook ledger Indicate whether the statement is true or false. 22. The gross income minus the tax exempt income equals the adjusted gross income. a. True b. False 23. Qualified dividends are taxed at the highest capital gain rates. a. True b. False 24. Russ and Lois got married on December 30. Even though they were single for most part of the year, they can legally file as married taxpayers in the year of the wedding. a. True b. False 25. A married couple filing a joint return has Ms. Cindy Cook, a CPA, complete their return. The IRS will hold only Ms. Cook responsible for any errors on the return. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 26. Which of the following is subject to federal income tax? a. The tax credit earnings on a Roth IRA b. Municipal bond interest c. Child care support d. Alimony received e. Personal exemptions 27. You would typically include _____ in your gross income. a. child support payment b. life insurance death benefit payments c. municipal bond interest d. income from pensions e. personal exemptions 28. If you do not wish to itemize deductions, you can use the: a. pay-as-you-go amount. b. bracket deduction. c. standard deduction. d. exemption. e. withholding allowance. Indicate whether the statement is true or false. 29. Cash is the only kind of liquid asset. a. True b. False 30. Debit cards are a form of EFTS. a. True b. False 31. Your savings will grow faster with monthly interest compounding than with quarterly interest compounding for a given nominal interest rate. a. True b. False 32. Today, you can hold an account with a mutual fund that allows you to write a limited number of checks. a. True b. False 33. Nondepository institutions are referred to as banks. a. True b. False 34. Compound interest means that a savings account earns interest on the interest previously earned. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 35. You have $450 in your checking account when your ATM card and PIN are stolen. You could lose up to _____ if you report the lost ATM card within 2 business days. a. $0 b. $25 c. $50 d. $450 e. $500 36. Mary has calculated her adjusted balance as $500. She notices that her bank's service charges are $20 for this period. Mary's ending balance is _____. a. $520 b. $480 c. $600 d. $500 e. $510 37. At maturity, a deposit of $6,000 in certificates of deposit (CD) for 10 years at 3% will be worth: (Select the closest answer.) a. $7,340. b. $7,800. c. $8,060. d. $8,678. e. $9,005. 38. John Anderson deposited $10,000 in certificates of deposit (CD) for 3 years at 5%. At maturity, it will be worth: (Use time value tables or a financial calculator. Select the closest answer.) a. $10,500. b. $10,725. c. $11,400. d. $11,580. e. $12,400. Enter the appropriate word(s) to complete the statement. 39. People who do not have checking accounts often use _________. A. a cashier's check B. overdraft protection C. a debit card D. the checkbook ledgerExplanation / Answer
22-(A) -Adjusted Gross Income equals:
Gross Income, MINUS
Above-the-line deductions listed on the front of Form 1040.
Taxable Income Equals:
Adjusted Gross Income, MINUS
Below the line deductions.
Below the Line Deductions Include:
Itemized deductions (from Schedule A of Form 1040).
The standard deduction (if you don't itemize), plus additional amounts for people 65 or older and/or blind.
Personal exemptions (for yourself, your spouse, and dependents)
23--(B) the case of qualified dividends and long-term capital gains, as of 2018, individuals in the 10% to 15% tax bracket are still exempt from any tax. Investors who fall in the middle brackets—25%, 28%, 33%, or 35%—pay 15% at most in capital gains. The highest earners, in the 39.6% bracket pay 20% in capital gains (plus 3.8% net investment income tax, per the Patient Protection and Affordable Care Act.
Dividends are income earned by investing in stocks, mutual funds or exchange-traded funds, and they are included in your tax return on Schedule B, Form 1040. Capital gains are the amount an asset increases in value between when it is purchased and when it is sold. The U.S. tax code gives similar treatment to dividends and short-term capital gains, and qualified dividends and long-term capital gains, respectively.
24-- true
25--(B) FALSE
26--(D)
27--(D)income from pension.
28--(D) EXEMPTION
29--(B) FALSE
30--(A) TRUE
31--(B)FALSE
32--(A) TRUE
33--(B) FALSE
34--(A) TRUE
Compound interest is interest paid on the initial principal as well as the accumulated interest on money you have borrowed or invested. Compound interest is like double chocolate topping for your savings. You earn interest on the money you deposit, and on the interest you have already earned - so you earn interest on interest. An online savings account paying monthly interest is an example of an account that earns compound interest.
Compound interest is different from simple interest. With simple interest, interest is paid at the end of a specified term, although if the term is more than 12 months, interest may be paid annually. A term deposit is an example of an account that earns simple interest.
35--(D)$450
36--(B)$480
37--(B)$7800
38--(D)$11580
39--(A)