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1. Use Publication 17, (in index), find Income. Then go to the page that it indicates and you see a paragraph headed 'Gross Income'. Read here to answer the following question.
Gross income includes all income you receive in the form of money, goods, property, and services that is not exempt from tax.
2. Use Publication 17, (in index), find Filing requirements, scroll down to find individuals then go to that page. Then go to that page and look for the 'Do I Have To File a Return? section and read the first paragraph to answer the following.
You must file a federal income tax return if you are a citizen or resident or the United States (unless the exception for not filing apply).
3. Use Publication 17,(in index), find Standard Deduction. Then go to that page and read the first two columns about standard deduction to answer the following question:
What is 'Standard Deduction'?
- [ ] A. Dollar amount that reduces the amount of tax directly.
- [ ] C. A variable amount that eliminates the need for taxpayers to file.
- [ ] D. All of the above
- [ ] B. An amount that depends on your filing status, and whether you are 65 or older or blind.
4. Use Publication 17,(in index), find Filing requirements, scroll down to "When to file", then go to that page to answer the following question:
For tax year 2008, when is the last day most taxpayers have to file their tax return?
- [ ] C. April 15, 2009.
- [ ] D. October 15, 2009.
- [ ] A. June 16, 2009.
- [ ] B. April 17, 2009.
5. Use Publication 17,(in index), find Penalties. Then go to that page and read the the "frivolous tax submission" section to answer the following question:
A frivolous tax return is one that does not include enough information to figure the correct tax or that contains information clearly showing that the tax you reported is substantially incorrect. You may have to pay a penalty if you file a frivolous return in the amount of
- [ ] C. $ 2,000.
- [ ] D. $ 1,000.
- [ ] A. $ 5,000.
- [ ] B. $ 3,000.
6. Use Publication 17,(in index), find Penalties. Then go to that page and just read the the "Paying tax late" section to answer the following question:
What is the penalty for failure to pay for each month or part of each month, after the due date that the return is not paid?
- [ ] B. 1/2 of 3% of your unpaid taxes.
- [ ] A. 1/4 of 1% of your unpaid taxes.
- [ ] D. 1/2 of 1% of your unpaid taxes.
- [ ] C. 1/2 of 2% of your unpaid taxes.
7. Use Publication 17,(in index), find Penalties. Then go to that page and read the the "filing late" section to answer the following question:
What is the penalty if you do not file your return by the due date?
- [ ] B. 3% for each month or part of a month that return is late, but not more than 20%.
- [ ] A. 1% for each month or part of a month that return is late, but not more than 10%.
- [ ] C. 5% for each month or part of a month that return is late, but not more than 25%.
- [ ] D. 1/2 of 1% for each month or part of a month that return is late, but not more than 25%.
8. From the link on History of U.S. Taxes. Answer the following as accurate as possible.
In 1862, Congress enacted the nation's first income tax law
- [ ] A. In order for the government to give bonuses to its employees.
- [ ] D. In order to support the Civil War effort.
- [ ] B. In order for the government to have more spending money for leisure activities.
- [ ] C. In order to support the campaigns of political parties.
9. From the link on History of U.S. Taxes. Answer the following as accurate as possible.
The Act of 1862 established the office of Commissioner of Internal Revenue. The Commissioner was given the power to
- [ ] C. Levy and collect taxes.
- [ ] B. To enforce the tax laws through seizure of property and income and through prosecution.
- [ ] A. Assess taxes.
- [ ] D. All of the above.
10. From the link on History of U.S. Taxes. Answer the following as accurate as possible.
The powers and authority of the office of Commissioner of Internal Revenue remain very much the same today.
11. From the link on History of U.S. Taxes. Answer the following as accurate as possible.
In 1913, the 16th Amendment to the Constitution made the income tax a permanent fixture in the U.S. tax system. The amendment gave Congress legal authority to tax income and resulted in a revenue law that taxed incomes of both individuals and corporations.
12. From the link on History of U.S. Taxes. Answer the following as accurate as possible.
On Oct. 22, 1986, President Reagan signed into law the Tax Reform Act of 1986. The act called for and increase in individual taxation over a five-year period.
13. From the link on History of U.S. Taxes. Answer the following as accurate as possible.
The Revenue Reconciliation Act of 1990 was signed into law on Nov. 5, 1990. The emphasis of the 1990 act was increased taxes on the wealthy.
14. From the link on History of U.S. Taxes. Answer the following as accurate as possible.
On Aug. 10, 1993, President Clinton signed the Revenue Reconciliation Act of 1993 into law. The act's main purpose was to
- [ ] B. Increase taxation of small business.
- [ ] A. Decrease taxation on corporations.
- [ ] D. Reduce the federal deficit.
- [ ] C. Reduce taxes of individuals.
15. Use IRS Publication 17 for the following.
Public assistance benefits from a public welfare fund is based upon need, such as payments due to blindness. You must include in your income any
- [ ] D. All of the above.
- [ ] C. Welfare payments that are compensation for services or that are obtained fraudulently.
- [ ] A. Welfare payments.
- [ ] B. Payments from a welfare state fund for the victims of crime.
16. Generally, property you receive as a gift, bequest, or inheritance is not included in income. If property you receive this way later produces income such as interest, dividends, or rents,
- [ ] A. That income is not taxable to you.
- [ ] B. That gift is taxable to you.
- [ ] D. None of the above.
- [ ] C. That income is taxable to you.
17. If a federal government agency, financial institution, or a credit union cancels or forgives a debt you owe of ________, you will receive a Form 1099-C, Cancellation of debt.
- [ ] A. $1,000 or more.
- [ ] B. $5,000 or more.
- [ ] D. $600 or more.
- [ ] C. $400 or more.
18. For tax year 2008, generally you must file a federal income tax return by April 15, 2009. If you are a U.S. citizen or resident, whether you must file a return depends on
- [ ] A. your gross income.
- [ ] C. your filing status.
- [ ] B. your age.
- [ ] D. All of the above.
19. In regards to penalties, this includes a failure to make a reasonable attempt to comply with the tax law or to exercise ordinary and reasonable care in preparing a return.
- [ ] C. Mal-intended.
- [ ] D. Careless-ness.
- [ ] A. Negligence or disregard.
- [ ] B. Sloppy-ness.
20. In 2008, if you use e-file (electronically filed), your return is considered filed on time if
- [ ] A. Your authorized electronic return transmitter sends all his transmissions by April 30, 2009.
- [ ] D. You mail the copies that the electronic return transmitter gives you by April 15 2009.
- [ ] B. Your authorized electronic return transmitter sends all his transmissions by April 17, 2009.
- [ ] C. The authorized electronic return transmitter postmarks the transmission by April 16, 2009.
21. After you have completed your return, peel off the label with your name and address from the back of your tax return package and place it in the appropriate area of the Form 1040 you send to the IRS. If you lived in California and have a balance due and you do not have an addressed envelope or if you moved during the year, mail your return to
- [ ] D. Internal Revenue Service Center, Fresno, CA 93888-0102.
- [ ] C. Internal Revenue Service Center, Atlanta, GA 39901-0102.
- [ ] A. Internal Revenue Service Center, Philadelphia, PA 19255-0215.
- [ ] B. Internal Revenue Service Center, Austin, TX 73301-0102.
22. You many have to pay an accuracy-related penalty if you underpay your tax because
- [ ] A. You show negligence or disregard of the rules or regulations.
- [ ] You make an addition error.
- [ ] D. A and C above.
- [ ] C. You substantially understate your income tax.
23. A joint return generally cannot be filed if either spouse is a nonresident alien at any time during the tax year. However, regarding this filing status, if one spouse was a nonresident alien or dual-status alien who was married to a U.S. Citizen or resident alien at the end of the year,
- [ ] D. None of the above.
- [ ] C. The couple can choose to file a joint return.
- [ ] B. The nonresident spouse cannot file a return in this country.
- [ ] A. The couple must file separately.
24. Candice, a 27 year old single woman , worked in computer store for around 4 months. Her earnings from work were $ 9,534 for all of tax year 2008. Her withholding for Federal was $590. She has no dependents. Which of the following is true about her filing requirement?
- [ ] A. She is absolutely obligated to file a return.
- [ ] B. Any one that earns any amount, especially from work has to file a tax return.
- [ ] C. She is not legally obligated to file.
- [ ] D. None of the above.
25. After you have completed your return, peel off the label with your name and address from the back of your tax return package and place it in the appropriate area of the Form 1040, 1040A, or 1040EZ you send to the IRS. If you lived in California and will get a refund and you do not have an addressed envelope or if you moved during the year, mail your return to
- [ ] C. Internal Revenue Service Center, Fresno, CA 93888-0102.
- [ ] D. Internal Revenue Service Center, Fresno, CA 93888-0002.
- [ ] A. Internal Revenue Service Center, Philadelphia, PA 19255-0215.
- [ ] B. Internal Revenue Service Center, Austin, TX 73301-0002.
26. Your income is only from wages, salaries, and tips. Which form is the simplest form to use?
- [ ] B. 1040
- [ ] C. 1040A
- [ ] A. 1040NR
- [ ] D. 1040EZ
27. Deductible real state taxes generally do not include taxes charged for local benefits and improvements that increase the value of the property.
28. If you deduct travel, entertainment, gift, or transportation expenses, you must exercise appropriate recordkeeping to be able to prove (or substantiate) certain elements of the expense.
29. The education credits are based on qualified education expenses you pay for
- [ ] B. A dependent for whom you claim an exemption.
- [ ] C. Your spouse.
- [ ] D. All of the above.
- [ ] A. Yourself.
30. Under an accountable plan, you are required to return any excess reimbursement or other expense allowances for your business expenses to the person paying the reimbursement or allowance.