Taxes Made Simple

Which type of retirement account allows you to make contributions before taxes are taken out of your income?

Traditional IRA

Correct Incorrect Correct answer

Roth IRA

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401(k)

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Keogh plan

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True or False: As long as you file a tax extension, you avoid penalty and interest assessments by the IRS.

True

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False

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What form(s) of contact does the IRS use for official communications?

Phone

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Email

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Mail

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All of the above

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If you hold a stock for less than one year, how are any profits taxed?

They are taxed at the same rate as your income

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They are taxed according to corporate gains tax rates

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Profits are always tax-exempt

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Profits are always tax-deferred

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Which of the following is tax deductible for homeowners?

Mortgage interest

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Property taxes

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Medically necessary home improvements

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All of the above

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True or false: Itemized deductions generally reduce tax liability to increase your tax refund over what you’d receive with a standard deduction

True

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False

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Which of the following is not a qualified expense for a Transportation Savings Account?

Parking costs

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Public transportation

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Vanpooling

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Fuel costs

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Which type of bond is exempt from both state and federal income taxes?

Treasury bonds

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Federal bonds

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Municipal bonds

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Corporate bonds

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Which of the following provides penalty-free forgiveness for an assessed tax debt from the IRS if you can qualify?

Innocent spouse

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Currently not collectible status

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Installment agreement

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Offer in compromise

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Which of the following can be claimed to reduce your tab liability when you use itemized deductions?

Child care expenses

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Business related expenses

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Charitable donations

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All of the above

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Taxes Made Simple

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