1) Sandra sells her house for $320000, and she bought it for $145000 10 years ago. If she has a 24 percent marginal tax rate, how much does she have to pay on the capital gains?

$76800

$0

$34800

$42000

2)Based on his taxable income calculation on his tax return, David owes $5670 in federal income taxes for the year. His employer reported to the IRS that it withheld $6570 from his paychecks this year. Which of the following statements is correct?

David owes an additional $900.

David will receive a refund of $900.

Davids employer will owe a penalty for under withholding.

David will not have to file a tax return.

3)Your employer offers dental insurance for $620 per year pretax through your employee benefit plan. However, your employer does not contribute toward the cost, and your marginal tax rate will be 24 %. Buying the dental insurance through payroll deduction

will cost you 24% of $620, so the net cost is $769.

will cost you 24 % of $620, so you will save $471.

will save you $149 in taxes, so the net cost is $471.

does not offer any financial advantage to you.

4)Steven contributes $1050 per month into his medical flexible spending account. During the year, he uses the funds for dental work and gets reimbursed the full amount in the account by the end of year. How much did Steven save in annual taxes if he is in the 12% tax bracket?

$6300

$1512

$12600

$1050

5)Richard, age 65, withdraws $12300 for retirement from his Roth IRA this year. How much will he owe in taxes if his current marginal tax rate is 12% and his average tax rate is 9%?

$1476

$0

$1107

$369

6)The standard deduction for married couples filing a joint tax return is

the same as the deduction for head of household.

more than twice the standard deduction for single filers.

less than twice the standard deduction for single filers.

twice the standard deduction for single filers.

7)In determining your taxable income, which of the following do you subtract from your adjusted gross income to arrive at taxable income?

Either the standard deduction or itemized deductions

The standard deduction, itemized deductions, or any eligible tax credits

Any eligible tax credits

One exemption for each person in the household

8)The U.S. income tax is considered

illegal.

progressive.

regressive.

transgressive.

9)Marginal tax rates today are relatively ______by historical standards.

average

high

low

equal

10)To which of the following does the marginal tax rate apply?

Next dollar of income

First dollar of income

Last dollar of income

Average dollar of income

11)When a tax system is progressive, with higher rates on higher levels of income, your averagetax rate will always be _______ your marginal rate.

more than

the same as

more than or equal to

less than