Ficep Final: CUNA Review Questions And Answers | Complete Solution Graded A+
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 s...
Ficep Final : CUNA Review Questions And Answers | Complete Solution Graded A+ 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 de scribes 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 autho rities 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 th e 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 de posit 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 disabil ities 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 softwa re 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 prog rams 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 o f qualified IRA withdrawal is exempt from income tax? ✔✔Roth IRA withdrawals are exempt. How do different tax authorities treat items excluded from federal taxable income? ✔✔Exclusions vary from state to state. What is the first step for effectively managing income taxes? ✔✔Determining your filing status. What should be the goal of managing a taxpayer's income tax withholding? ✔✔To maintain cash flow while avoiding a tax bill at filing time. What happens to yea r-end balances "left over" in Section 125 plans or health savings accounts (HSAs)? ✔✔Section 125 balances are forfeited, while HSA balances are rolled over How much can a member in the 25% tax bracket save in federal income taxes by depositing pre -tax inc ome into tax -deferred retirement accounts, such as traditional IRAs? ✔✔One-fourth of the deposit. Which statement accurately describes options for reducing income taxes? ✔✔Tax exemptions, deductions, and credits all help reduce income taxes. Which group of taxpayers usually qualifies for the Earned Income Tax Credit (EITC)? ✔✔Low-income families with earned income qualify for the credit. These six expenses are typically accepted by the IRS as itemized deductions: ✔✔Traditional IRA contributions, alimony payments, real estate taxes paid, state and local income taxes, mortgage interest, and casualty and theft losses. What is the first step financial counselors can take to determine whether a member is properly managing their taxes? ✔✔Review the member's pa yroll stub. What is the meaning of the insurance practice "pooling of risks"? ✔✔Combining risks among insurers as well as groups of individuals. What is an insurable interest? ✔✔The policyholder's monetary interest in the insured property. From the pers pective of your financial well -being, what is the best way to decide whether or not you should insure a particular item? ✔✔Consider the risk to your assets. Select the correct description for the "elimination period". ✔✔How long a person must be disabled before they are eligible for benefits. When does Workers' compensation provide benefits to workers? ✔✔When the worker has a work -related illness or injury. In addition to administrative costs, litigation, and third -party payments, what two factors have s ignificantly contributed to rising health insurance costs? ✔✔The rising cost of medical technology, as well as the fact that people are living longer. How did the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 impact employee health benefits? ✔✔It gave employees the right to retain health insurance after their job ends by paying the full premium. If a member decides to purchase long -term care insurance, when is the best time to obtain a policy? ✔✔Sign up while they are still in good health so carriers will accept you. What types of insurance policies should be avoided by most members? ✔✔Policies which offer coverage only in very specific conditions, making it hard to qualify for benefits. Which group of people is most likely to purchase HO -4, or "contents coverage"? ✔✔Renters
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