CTFA

CTFA practice questions, page 12 of 35, with answer review and explanations.

Question 56

Average tax rate:

  1. Is the rate at which each dollar of taxable income is taxed on average; calculated by dividing the tax liability by taxable income
  2. Is the rate at which each dollar of taxable income is taxed annually; calculated by dividing the tax liability by taxable income.
  3. Is the rate at which each dollar of taxable income is taxed on average; calculated by dividing the tax liability by non-taxable income
  4. Is the rate at which each dollar of taxable income is taxed on average; calculated by dividing the tax liability by expenses

Question 57

Which of the following would be included in a cash budget?

  1. Depreciation charges
  2. Dividends
  3. Patents
  4. Amortization

Question 58

It is the deduction of AGI based on the number of persons supported by the taxpayer's income

  1. Exemption
  2. Dependence
  3. Tax payment
  4. Adjustment

Question 59

Exemptions are phased out and eliminated altogether for taxpayers with high levels of AGI. After adjusting for inflation it applies to single taxpayers with 2008 AGI:

  1. Under $159,950
  2. Over $159,950
  3. Equal to $179,950
  4. Over $189,950

Question 60

The illegal act failing to accurately report income or deductions and in extreme cases, failing to pay taxes altogether is:

  1. Tax avoidance
  2. Tax Invasion
  3. Tax Evasion
  4. None of these