1. Which of the following does NOT need to be reported as income for federal income tax purposes?

A) Monetary graduation gifts received

B) Tips received

C) Unemployment insurance payments

D) Bonus received from employer

2. You are in the 24 percent marginal tax bracket and itemize deductions. What impact will an additional $1950 tax credit have on your federal income taxes owed?

A) It will reduce my taxes owed by $1950.

B) It will have no effect on my taxes owed.

C) It will increase my taxes owed by $468.

D) It will reduce my taxes owed by $468.