1. When Marissa completes her taxes, she can include her qualified dependent children, her husband, and herself as exemptions. True False 2. Lauren owns her business and is thinking about saving for retirement. She wants to invest up to 25% of her annual income. Which plan should she use? Roth IRA 401(k) Keogh plan FSA Traditional IRA 3. Joseph needs to complete his income taxes for the year. He has already calculated his adjusted gross income. What does he need to do next? Add his tax-exempt income. Subtract his itemized deductions. Add his tax credits. Subtract his tax-exempt income. Add his tax exemptions. 4. The maximum that an individual can contribute to a Roth IRA for the 2014 year is $1,000. $3,000. $5,500. $10,000. $15,500. 5. Amounts given for tuition payments or medical expenses are not subject to gift taxes. True False 6. Annie was required to clarify or document minor questions about her tax form by a mail inquiry. She participated in a(n) Correspondence audit. Office audit. Home audit. Field audit. Detailed audit. 7. Adjusted gross income is increased by the itemized or standard deduction. True False 8. Using tax software will not save a taxpayer any time when preparing Form 1040. True False 9. When calculating federal income taxes, "gross income" includes all of the following except Earned income. Alimony. Investment income. Earned income credit. Passive income. 10. Which of the following is NOT a valid form for filing federal income taxes? 1040EZ 1040A 1040 1040X 1040Z 11. Tax assistance sources include all of the following except IRS publications. IRS phone hotline. The Ernst & Young Tax Guide. The Internet. All of these are tax assistance sources. 12. Recent tax credits include all of the following except the Earned income credit. Foreign tax credit. Adoption tax credit. AMT tax credit. Savers credit. 13. If Diane was in a 25% tax bracket and received a $1,000 tax credit, by how much would her taxes be reduced? $25 $50 $250 $500 $1,000 14. Individuals are allowed to give money or items of any value to a person without being subject to estate taxes. True False 15. Which of the following is NOT a tax that most people pay? Federal taxes on earnings Federal taxes on possessions Local taxes on property State taxes on purchases