We all have to pay taxes, but we all want to keep as much of our money as possible. Knowing how to navigate the complex tax code to your benefit is not easy. Do you know which things you can deduct from your income? Take our quiz to find out what you know about the complex world of tax deductions.
Which of these statements best describes a tax deduction?
A tax deduction is a dollar amount by which you can reduce your taxable income.
A tax deduction is an amount of money sent to you by the government because you've paid to much money in taxes.
A tax deduction is a portion of your paycheck that is taken to pay for taxes.
How many Americans fail to take advantage of all the tax deductions available to them?
If you want to ensure that you declare your taxes accurately and legally, you should do which of the following?
Carefully study the U.S. Federal Tax Code.
Hire a professional accountant or tax attorney.
Use a well-prepared spreadsheet.
Above-the-line deductions are applied to which of these?
What is the definition of an adjusted gross income (AGI)?
Your AGI is your gross income minus your above-the-line deductions.
Your AGI is your net worth divided by your age, plus your annual salary.
Your AGI is your income after it has been adjusted for inflation.
A married couple receives a standard deduction of what amount?
Which of these statements best describes an itemized deduction?
Itemized deductions are the deductions that only businesses can use.
Itemized deductions are deductions for college students.
Itemized deductions are expenses you may deduct from your AGI in place of standard deductions.
Which of these is an example of an expense you can itemize?
a work uniform
a wedding dress
an expensive dinner
How much of the interest on a student loan can you deduct if you're not a dependant?
What percentage of the interest on your mortgage can you deduct?
Which of these best describes which self-owned business expenses you may deduct?
You may deduct only office supplies.
You may deduct 50 percent of all of your business expenses.
You may deduct anything considered necessary to run a self-owned business.
What are the two categories of charitable organizations?
secular and religious
public and private
standard and premium
What percentage of your contributions to a public charity may you deduct?
How do find out whether your contributions to a charity are deductable?
Ask the organization.
All charity is tax-deductable.
Look in the IRS's Publication 78.
To deduct health insurance expenses from your AGI, the expenses must exceed what percentage?
What is the approximate income cap on the earned income tax credit.
Which form should fill out to amend your tax deductions?
a Federal Amendment and Revision of Taxes form
an IRS 1040x form
an IRS W-2 form
Which of these is an example of an non-itemized tax deduction?
business travel expenses
the cost of an engagement ring
child tax credit
You may claim a child tax credit until your child is how old?
What is the maximum you can deduct from your contributions to an Individual Retirement Account (IRA)?