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Exam 3: Taxes in Your Financial Plan

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Question 1

Multiple Choice

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The ______________ property tax is based on the value of land and buildings.

A) personal
B) real estate
C) direct
D) proportional
E) regressive

F) C) and D)
G) A) and B)

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Question 2

Multiple Choice

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Phillip Marnier had earnings from his salary of $40,000,interest on savings of $700,and a contribution to a registered retirement saving plan of $1,500.Phillip's net income would be

A) $39,200.
B) $40,000.
C) $39,300.
D) $38,500.
E) $41,500.

F) A) and D)
G) All of the above

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Question 3

Multiple Choice

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Money received by an individual for personal effort is ____________ income.

An estate tax is imposed on the value of an individual's property at the time of his or her death.

What is the difference between the marginal tax rate and the average tax rate? In most cases,which rate is less? If your taxable income in 2004 was $50,000,what would be your federal taxes,marginal tax rate and average tax rate?

Identify the correct statements I Tax deductions are more valuable to a high income earner than tax credits. II RESPs are excellent income splitting vehicles for families with young children. III Students can deduct moving expenses when they move back home to take up a summer job.

There is no significant difference between a federal tax credit and a federal tax deduction.

Jeffrey is a self-employed carpenter.He bills his clients $60,000 a year.Total business expenses amount to $10,000 a year.His only eligible income tax deduction is $5,000 for an RRSP contribution.If the first $36,000 of taxable income is taxed by the Federal Government at a rate of 15% and levels up to approximately $70,000 are taxed at 22%,what is his federal tax liability before considering tax credits?

Which of the following would be excluded from total income to obtain net income?

An exemption affects a person's tax situation by:

An RRSP,RPP,and IPP are examples of

Taxes are not only considered in financial planning in April.

A tax credit is an amount subtracted directly from the amount of taxes owed.

A tax ____________ is an amount subtracted directly from the amount of taxes owed.

If you are a self-employed individual,you do have to make both employee and employer contributions to the CPP or QPP.

Why are capital losses important?

Sheira Harvey worked in Poland for part of the year and earned $50,000 while she was there.This income will not be included in her income for the year.This represents:

Which of the following is a standard tax credit?

Tax evasion refers to illegal actions to reduce one's taxes.

Taxable income is used to compute a person's