Quiz Understanding the Financial Planning Certification Exam Part 4 Lesson 2
Multiple Choice Quiz: Financial Planning Certification Exam – Tax Lesson 2
Question 1: What is the primary focus of Tax Lesson 2 in the Financial Planning Certification Exam?
a) Tax deductions
b) Rate schedules and special taxes
c) Tax credits
d) Tax evasion techniques
Question 2: Which tax system does the United States primarily use?
a) Regressive tax system
b) Progressive tax system
c) Flat tax system
d) Proportional tax system
Question 3: What is the purpose of the Kitty Tax?
a) To lower taxes for individuals with pets
b) To discourage shifting assets to lower tax bracket individuals, primarily children
c) To increase tax deductions for families with young children
d) To provide tax breaks for pet adoption
Question 4: Which Act introduced the Kitty Tax?
a) 1986 Tax Act
b) 2007 Tax Act
c) 1999 Tax Act
d) 2010 Tax Act
Question 5: What is the primary rate of the self-employment tax?
a) 10%
b) 15%
c) 20%
d) 14.13%
Question 6: What type of income is included in self-employment income?
a) Wages from an S Corp
b) Real estate income
c) 1099 earnings above $600
d) Dividends
Question 7: Which of the following is NOT included in self-employment income?
a) Wages from an S Corp
b) Real estate income
c) Net schedule fee income
d) Dividends
Question 8: What is the key focus of the Financial Planning Certification Exam?
a) Wealth management strategies
b) Retirement planning
c) Tax planning and regulations
d) Investment banking techniques
Question 9: What does FICA stand for?
a) Federal Income and Contributions Act
b) Federal Insurance Contributions Act
c) Federal Investment Contributions Act
d) Federal Income Calculation Act
Question 10: Which age group does the Kitty Tax expansion of 2007 pertain to?
a) Children under 10
b) Children between 10 and 15
c) Children between 18 and up to age 23
d) Children above age 25
Question 11: What is the primary rate for Social Security tax under FICA?
a) 6.2%
b) 10%
c) 15%
d) 1.45%
Question 12: What is the purpose of the progressive tax system?
a) Lower taxes for high-income individuals
b) Same tax rate for everyone
c) Higher taxes for lower-income individuals
d) Higher taxes for higher-income individuals
Question 13: What is the standard deduction for children under age 18?
a) $1,000
b) $2,000
c) $1,250
d) $1,500
Question 14: What Act introduced the expansion to the Kitty Tax in 2007?
a) 1986 Tax Act
b) 2007 Tax Act
c) 1999 Tax Act
d) 2010 Tax Act
Question 15: Which form is used to report self-employment income?
a) Form W-2
b) Form K1
c) Form 1099
d) Schedule C
Question 16: What is the primary focus of the Kitty Tax?
a) Encouraging gifts to children
b) Discouraging gifts to children
c) Lowering taxes for children
d) Increasing taxes for children
Question 17: What type of income does NOT incur self-employment tax?
a) Real estate income
b) 1099 earnings above $600
c) Wages from an S Corp
d) Board of directors fees
Question 18: What is the maximum income limit for Social Security tax under FICA?
a) $100,000
b) $150,000
c) $160,200
d) No limit
Question 19: Which tax is based on net earnings from self-employment?
a) Income tax
b) Sales tax
c) Property tax
d) Self-employment tax
Question 20: What is the primary purpose of FICA tax?
a) Funding education programs
b) Funding Social Security and Medicare programs
c) Funding military programs
d) Funding environmental protection programs
Answer Key:
Answer Key:
1 b) Rate schedules and special taxes
2 b) Progressive tax system
3 b) To discourage shifting assets to lower tax bracket individuals, primarily children
4 a) 1986 Tax Act
5 d) 14.13%
6 c) 1099 earnings above $600
7 a) Wages from an S Corp
8 c) Tax planning and regulations
9 b) Federal Insurance Contributions Act
10 c) Children between 18 and up to age 23
11 a) 6.2%
12 d) Higher taxes for higher-income individuals
13 c) $1,250
14 b) 2007 Tax Act
15 d) Schedule C
16 b) Discouraging gifts to children
17 c) Wages from an S Corp
18 c) $160,200
19 d) Self-employment tax
20 b) Funding Social Security and Medicare programs
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