This quiz works best with JavaScript enabled. Home > Taxation > Income Tax Planning > Income Tax Planning – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Income Tax Planning Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Tax Planning is opted in the reference of the following- A) Only Income Tax. B) Only Direct Tax. C) Direct & Indirect Tax both. D) Central Taxes. Show Answer Correct Answer: C) Direct & Indirect Tax both. 2. What is NOT a reason you can take an early withdrawal from your IRA without penalty? A) Down payment on your first home. B) To pay for higher education. C) To pay taxes owed to the IRS. D) To pay for unreimbursed medical expenses. Show Answer Correct Answer: C) To pay taxes owed to the IRS. 3. This is a series of regular payments made to a retired worker under an organized plan. A) Pension. B) Outflows. C) Allowances. D) None of above. Show Answer Correct Answer: A) Pension. 4. The total amount of an employee's earnings before deductions are taken out. A) Net pay. B) Cash flow. C) Net worth. D) Gross pay. Show Answer Correct Answer: D) Gross pay. 5. What are the four elements of a contract that makes it legally binding A) Agreement, consideration, contractual capacity, legality. B) Agreement, consolidation, legality, solvency. C) Adoration, consideration, equality, taxes. D) Agreement, value, signature, notarization. Show Answer Correct Answer: A) Agreement, consideration, contractual capacity, legality. 6. What is considered to be "retirement" age, when it is acceptable to begin taking IRA distributions without penalty? A) 50. B) 59 1/2. C) 65. D) 70 1/2. Show Answer Correct Answer: B) 59 1/2. 7. Mr. Johnson received $ 1, 750 on his paycheck for two weeks. He got $ 275 taken out of his check for taxes and $ 125 for his health insurance. The amount he had left is defined as his- A) Gross income. B) Net income. C) Income tax. D) Property tax. Show Answer Correct Answer: B) Net income. 8. Which one of the following is NOT a mandatory withholding from your gross pay? A) Medicare/Medicaid. B) Union Dues. C) Social Security. D) Federal Tax. Show Answer Correct Answer: B) Union Dues. 9. The difference between your personal assets and your personal liabilities is your A) Cash inflow. B) Net worth. C) Cash outflow. D) Net income. Show Answer Correct Answer: B) Net worth. 10. Take-home pay is A) The amount of a paycheck before taxes and other payroll deductions. B) The money you have available to spend as a result of working plus any other income, such as a gift or stock dividend. C) The amount you will receive when you cash your paycheck. D) Cash inflows minus cash outflows. Show Answer Correct Answer: C) The amount you will receive when you cash your paycheck. 11. Stevie earned $ 600 this week. She used $ 100 toward paying off her credit card and $ 20 went into savings, for a total of $ 120, which is 20% of her income. What money managing system is she likely using? A) Pay yourself first. B) The 50-30-20 Method. C) The Categories Method. D) Investing in stocks. Show Answer Correct Answer: B) The 50-30-20 Method. 12. You never know what's going to happen in life, no matter how hard you plan. Luckily, there are insurance companies available to try to take some of the pain out of the disasters that befall all of us at some time or other A) Risk Management. B) Financial Planning. C) Retirement Planning. D) Budget. Show Answer Correct Answer: A) Risk Management. 13. If you worked 40 hours per week at $ 10 per hour, what is your gross income for the week? A) $ 227. B) $ 4000. C) $ 40. D) $ 400. Show Answer Correct Answer: D) $ 400. 14. Deductions are also known as .....? A) Withdrawals. B) Withholdings. C) Subtractions. D) None of the above. Show Answer Correct Answer: B) Withholdings. 15. The total amount of money earned before withholdings A) Net pay. B) Gross pay. C) Payroll deductions. D) None of these. Show Answer Correct Answer: B) Gross pay. 16. A unit rate used to compare prices. A) Unit price. B) Percent decrease. C) Sales tax. D) Income. Show Answer Correct Answer: A) Unit price. 17. When studying finance or economics, the cost of a decision is also known as a(n) A) Personal cost. B) Long-term cost. C) Long-term cost. D) Opportunity cost. Show Answer Correct Answer: D) Opportunity cost. 18. Which of the following obligations are required to be settled prior to the distribution of estate? I. Burial/ Funeral expensesII. Settlement of debtsIII. Execution of WasiyyahIV. Distribution of Estate under Faraid A) I and II. B) I, II, and III. C) II and III. D) All the above. Show Answer Correct Answer: D) All the above. 19. A value is: A) Something essential for living. B) An expense. C) A belief about ideas and principles that are important to you. D) Something you would like to have but do not need to live. Show Answer Correct Answer: C) A belief about ideas and principles that are important to you. 20. Choose the "Unexpected Expense" A) Groceries each week. B) Storm damage repairs. C) School clothes. D) Netflix subscription bill. Show Answer Correct Answer: B) Storm damage repairs. ← PreviousNext →Related QuizzesTaxation QuizzesIncome Tax Planning Quiz 1Income Tax Planning Quiz 2Income Tax Planning Quiz 4Income Tax Planning Quiz 5Income Tax Planning Quiz 6Income Tax Planning Quiz 7Income Tax Planning Quiz 8Income Tax Planning Quiz 9Income Tax Planning Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books