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FiCEP Final: CUNA Review

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FiCEP Final: CUNA Review Select the statement that correctly describes a progressive tax. - ✔✔A progressive tax requires people to pay more as they earn more. Pick the statement that best describes a regressive tax. - ✔✔A regressive tax charges the same tax rate regardless of the taxpayer's income. Why are government fees and surcharges sometimes described as a form of tax? - ✔✔Because they generate income for the government. Which taxing authorities are worthy of the member's attention? - ✔✔The member must attend to all tax authorities at all levels of government to maintain their financial well-being. How do taxes impact your personal spending? - ✔✔Taxes can make personal spending go up or down. Which is larger: the penalty for failing to pay federal income taxes on time, or the penalty for failing to file a tax return when taxes are owed? - ✔✔The penalty for failing to file a tax return is significantly higher. What is the right attitude to take toward taxes to protect your financial well-being? - ✔✔Taxes are an essential financial responsibility. When is the IRS most likely to impose the maximum penalty on taxpayers? - ✔✔When they are forced to track down the taxpayer. What is a good rule to follow when dealing with a tax auditor or another issue involving the IRS? - ✔✔Never assume the IRS is always correct. What is the financial counselor's role in aiding members with complex tax issues? - ✔✔The counselor provides basic information and refers members to tax programs or tax experts. What happens when taxpayers who file a late return for any or all of the 4 most recent tax years are owed a refund? - ✔✔No penalty is charged and the taxpayer gets the full refund amount. What tax services are provided by the Volunteer Income Tax Assistance (VITA) program? - ✔✔Free tax return assistance to low- or moderate-income taxpayers. What benefit is offered when VITA services are combined with credit union programs that encourage taxpayers to open accounts for direct deposit of tax refunds? - ✔✔Direct deposit reduces the time required to get a refund, which counters the appeal of refund anticipation loans. What is the name of the organization that offers free tax assistance to taxpayers age 60 or older, those with disabilities or special needs, or who qualify for earned income or homestead tax credits? - ✔✔Tax Counseling for the Elderly (TCE) What percent of tax payers are eligible to use the "Free File Online" service offered as a partnership between the IRS and tax software companies? - ✔✔70% are eligible When members use tax refunds to pay down debts, which debts should be paid first? - ✔✔Always pay the debts with high interest rates or that could prompt garnishments. How have education, information, and direct deposit programs impacted taxpayers' use of refund anticipation loans? - ✔✔The use of refund anticipation loans is decreasing. What rule of thumb should be used when defining taxable income? - ✔✔If you benefit financially, you are likely to be taxed for it. Which type of qualified IRA withdrawal is exempt from income tax? - ✔✔Roth IRA withdrawals are exempt. How do different tax authorities treat items excluded f

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