Succeeding in the World of Work

Chapter 23: Taxes and Social Security

Taxes and Social Security


1.	To which governmental entities are taxes paid?
		A)	local governments
		B)	state governments
		C)	the federal government
		D)	all of the above


2.	What is the federal government agency that collects taxes?
		A)	IRS
		B)	SSA
		C)	NSA
		D)	FBI


3.	The amount of income tax you pay is based on what?
		A)	the amount of money you earn in wages
		B)	the amount of money you earn in interest on savings accounts
		C)	profits from the sale of real estate
		D)	all of the above


4.	What does the IRS require self-employed people to do?
		A)	pay income taxes quarterly
		B)	withhold income taxes from the salaries they pay themselves
		C)	pay income taxes but not Social Security taxes
		D)	pay extra sales tax


5.	On your pay stub, what does the amount marked “FICA” represent?
		A)	the amount withheld for income tax
		B)	the amount withheld for Social Security taxes
		C)	the amount withheld in a federal savings account
		D)	the amount of Social Security tax you paid last year


6.	How can U.S. citizens influence how their tax dollars are spent?
		A)	becoming educated about the tax system
		B)	ensuring that people who earn more pay more in taxes
		C)	voting
		D)	refusing to pay for services they don't approve of


7.	According to the text, what should a good tax system be?
		A)	fair
		B)	clear and simple
		C)	stable
		D)	all of the above


8.	What do you need to do if your employer withheld income taxes from your paycheck?
		A)	you do not need to file an income tax return
		B)	you need to include only other income, such as interest on savings accounts, on your tax return
		C)	you need to file a tax return to show how much you earned from all sources and how much tax you owe
		D)	you need to get a tax refund


9.	What is the form that tells a company how much to withhold from a person's paycheck?
		A)	W-4
		B)	W-2
		C)	1099
		D)	EZ


10.	What is a legal way to reduce the amount of income on which you must pay tax?
		A)	put money into a 401(k) fund
		B)	say you earned less than you actually did
		C)	claim extra deductions
		D)	all of the above


11.	Who pays Social Security taxes?
		A)	disabled workers
		B)	the government
		C)	employees and employers
		D)	the elderly


12.	Which of the following is not an example of a Social Security benefit?
		A)	disability benefits
		B)	workers' compensation
		C)	retirement benefits
		D)	Medicare


13.	Who provides unemployment insurance?
		A)	the federal government, through the Social Security Administration
		B)	the federal government, through the Department of Labor
		C)	the individual states
		D)	corporations


14.	Why is the Social Security system believed to be going broke?
		A)	because people are not living long enough
		B)	because not enough people are retiring early
		C)	because there will be fewer young workers to pay into Social Security in the future
		D)	because the retirement age is increasing


15.	What is tax that is calculated as a percentage of the price of an item purchased?
		A)	income tax
		B)	sales tax
		C)	purchasing tax
		D)	excise tax