Multiple Choice Write the appropriate letter in the blank that corresponds to each question: 1 pt. each

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1 UNIT 3 TEST: Income & Taxes Multiple Choice Write the appropriate letter in the blank that corresponds to each question: 1 pt. each 1. Training employees to be efficient in more than one skill is called. a. Flextime c. Job rotation b. Job sharing d. Overtime 2. Which is not a major function of labor unions? a. Recruit new members c. Provide support services for members b. Oversee collective bargaining d. Administer exams and accreditations 3. The right of a person hired first to be fired last is called. a. A fringe benefit c. Seniority b. Sick leave d. A work incentive 4. The American Dental Association is an example of which of the following? a. A labor union c. A professional organization b. A management group d. A mediator 5. Which of the following workplace trends allows flexibility for employees in work hours? a. Job rotation c. Family leave b. Job sharing d. Flextime 6. The property tax is an example of which type of tax? a. Progressive c. Regressive b. Proportional d. Excise 7. As taxable income increases, income tax rates. a. Increase c. Stay the same b. Decrease d. Could go either way 8. What type of income is used to look up your tax in the tax table? a. Adjusted gross income c. Gross income b. Taxable income d. Net income 9. Which of the following is not an income tax filing status? a. Single person c. Divorced person b. Married person filing joint return d. Head of household 10. An examination of tax returns by the IRS is called. a. Tax evasion c. A tax bracket b. An audit d. An itemization

2 11. Which of the following is not part of taxable income? a. Tips c. Child support b. Interest d. Dividends 12. Which of the following deductions from a employee s paycheck is mandatory? a. FICA c. Medical Insurance b. Dental Insurance d. Retirement 13. Married filing jointly is an example of a(n). a. Benefit c. Personal exemption b. Filing status d. Deduction 14. Social Security and Medicare make up an employee s deductions. a. Interest c. 401K b. FICA d. IRA 15. This form is filled out as a part of new-hire paperwork to determine the amount of taxes withheld from an individual s paycheck. a. W-4 c. W-2 b d. W Stipends are. a. One time lump sum payments c. Paid to individuals who work over 40 hrs. per week. b. A percentage of sales d. Deductions to gross income 17. Wages are? a. Hourly earnings c. One time lump sums b. A percentage of sales d. Exempt from federal income tax 18. Overtime is calculated as. a. double time c. triple-time b. time-and-a-half d. half-time 19. An individual who works in management for Walmart is said to work in the. a. Private sector c. Blue-collar industry b. Public sector d. Military 20. An individual who teaches for Stafford County Schools is said to work in the. a. Private sector c. Blue-collar industry b. Public sector d. Military

3 21. For 2013, a personal exemption was valued at. a. $9750 c. $5950 b. $3900 d. $11, Time off, insurance, bonuses and alternative work schedules are all examples of. a. Salary c. Assets b. Benefits d. Compensation 23. Willful failure to pay taxes is a crime known as. a. Tax evasion c. Voluntary compliance b. Fraud d. Auditing 24. The money given back to the tax-payer if they have over paid taxes for the year is known as the tax. a. Assessment c. Refund b. Audit d. Deduction 25. Social security and Medicare are deductions from our gross pay also known as deductions a. FDA c. Taxable b. Fiscal d. FICA 26. Another word for financial is. a. Monetary c. Neither A or B b. Fiscal d. Both A and B 27. Jimmy Hoffa was the leader of the most famous labor union in history known as. a. The AFL-CIO c. The Teamsters b. The US Auto Workers d. The American Medical Association 28. A sales tax is an example of a. a. Progressive Tax c. Proportional tax b. Regressive tax d. Income tax 29. An Auto Mechanic is an example of a(n) worker. a. White collar c. Executive b. Blue collar d. In the red 30. A Corporate Attorney is an example of a worker. a. White collar c. Black market b. Blue collar d. Government

4 Matching Write the appropriate letter in the blank that corresponds to each definition: 1 pt. each A. W-2 B. Exemptions C. Gross income D. Dividend income E. Deductions F. Form 1040EZ G. Form 1040 H. Progressive taxes K. Child support L. Itemizing M. Standard deduction N. Filing status O. Public Sector P. Net pay Q. Commission R. Regressive taxes I S. Alimony J. Private sector T. Form 1040A R B D C S E F G T K L M N I P O Q J A 1. Taxes that take a smaller share of income as the amount of income grows. Ex. sales tax 2. An amount you may subtract from your income for each person who depends on your income to live. 3. Money, stock or other property that corporations pay to stockholders in return for their investment. 4. Wages, salary, tips and other compensation all add up to this. 5. Money paid to support a former spouse for the maintenance of a personal lifestyle. 6. Expenses the law allows you to subtract from your adjusted gross income. 7. To use this form you must have earned less than $1500 in taxable interest & have no dependents. 8. You must use this form if you have earned less than $100,000 but have dependents and do not plan to itemize. 9. Use this form if you have earned more than $100,000 and/or you are choosing to itemize. 10. Money paid for support of dependent children. 11. Listing allowable expenses on your tax return. 12. The stated amount that you may deduct from your gross income as opposed to itemizing. 13. Examples are single, head of household and married filing jointly. 14. A form that reports income from dividends, interest, unemployment and/or social security. 15. Gross Pay - Deductions. 16. The part of the national economy that is controlled by the government. 17. A form of compensation which is derived from a percentage of an employee s sales. 18. The part of the national economy that is not under direct government control. 19. A form which reports income from wages, tips and/or salary.

5 YOU WILL NOT BE REQUIRED TO DO A TAX FORM ON YOUR MIDTERM Part 3: Filing Income Taxes 20 pts Use the following data to complete the attached 1040EZ form. Name: Your First and Last Name Address: 123 Steeler s Lane Pittsburgh, PA SS#: Profession: School Teacher Marital Status: Single Taxable interest: $100 Unemployment compensation: $0 Earned income credits: $0 Gross Salary: $50,000 Federal Income Tax Withheld: $3000 Your income is at least But not more than Single Married 40,000 40,050 2,584 2,133 40,050 40,100 2,588 2,137 40,100 40,150 2,592 2,140 40,150 40,200 2,596 2,144 40,200 40,250 2,600 2,147 40,250 40,300 2,604 2,151 40,300 40,350 2,608 2,155 40,350 40,400 2,612 2,158 40,400 40,450 2,616 2,162 40,450 40,500 2,620 2,165 40,500 40,550 2,623 2,169 40,550 40,600 2,627 2,173 40,600 40,650 2,631 2,176 40,650 40,700 2,635 2,180 40,700 40,750 2,639 2,183 40,750 40,800 2,643 2,187 40,800 40,850 2,647 2,191 40,850 40,900 2,651 2,194 40,900 40,950 2,655 2,198 40,950 41,000 2,659 2,201

6 Part 4: Short Answer 3 pts. each Give an example of each of the following: 1. An expense a taxpayer my deduct if they are choosing to itemize deductions: Medical expenses /Dental expenses/ Property taxes / Mortgage interest / Gifts to charity / Losses from theft / property damage / moving expenses 2. A tax/fiscal form that we have studied and its purpose: Form 1040EZ For filing income taxes (use if you earn less than $1500 in taxable interest & no dependents) Form 1040A For filing income taxes (use if you earn less than $100,000 & qualify for credits / deductions) Form 1040 For filing income taxes (use if you earn more than $100,000 and/or you are choosing to itemize) Reports to taxpayer income other than what is on the W-2. (dividends, unemployment, interest) W-4 Reports to employer who many exemptions an employer has and determines how much will be deducted from pay check each pay period. 3. A variable expense: Electricity/ Water/Sewer/ Some mobile phone plans/ Gas/ Groceries 4. An exemption on federal and state taxes: Unemployed spouse / Blindness / Children 5. The standard deduction for 2013 for a single tax payer: $6, A benefit commonly offered to employees: Paid holidays/ Health insurance/ Over-time pay for hours worked over 40 hours a week /Flex-time /Discounts on products sold by company /Stock options Part 5: Calculating Gross Pay 3 pts. each 1. Lucy receives $300 per week for salary as a sales associate. Her quota is $3,000 and her commission percentage is 9%. This week, Lucy sold $15,000 in merchandise, $1000 of which was returned. Calculate her gross pay for the week: $ Austin worked 50 hours this week and gets paid $ an hour. Calculate his gross pay for the week: $

7 3. George worked 60 hours this week. For working 5 hours on the 4th of July, George gets double time. George makes $9 an hour. Calculate his gross pay for the week: $ Sam gets paid $8.00 an hour. This week, he worked 40 hours. Calculate his gross pay for the week: $ Brett gets $54,000 salary annually. Calculate his monthly gross pay: $