Personal Finance and Taxation Quiz

Challenge yourself with 12 questions covering tax returns, deductions, retirement accounts, penalties, and more in this taxation quiz.

Practice Learn Test

What is the purpose of a tax return?

To pay taxes to the government

To request a tax refund

To report income and deductions to the IRS

To calculate tax credits

Which of the following is a tax-deductible expense?

Grocery bills

Entertainment expenses

Medical expenses

Clothing purchases

What is the purpose of a W-2 form?

To report income earned from self-employment

To report income earned as an employee

To report investment income

To report income earned from rental properties

What is the deadline for filing federal income tax returns in the United States?

April 15th

March 15th

May 15th

June 15th

What is the difference between a tax deduction and a tax credit?

A tax deduction reduces taxable income, while a tax credit reduces the amount of tax owed dollar-for-dollar

A tax deduction reduces the amount of tax owed dollar-for-dollar, while a tax credit reduces taxable income

A tax deduction and a tax credit both reduce taxable income

A tax deduction and a tax credit both directly reduce the amount of tax owed dollar-for-dollar

Which of the following is an example of a regressive tax?

Sales tax

Income tax

Property tax

Capital gains tax

What is the purpose of Form 1099?

To report income earned from employment

To report income earned as an independent contractor

To report investment income

To report rental income

Which of the following retirement accounts allows for tax-free withdrawals in retirement?

Traditional IRA

Roth IRA

401(k)

Pension plan

What is the capital gains tax rate for assets held longer than one year in the United States?

10%

15%

20%

25%

#10

Which of the following is NOT considered a tax-favored investment account in the United States?

529 plan

Health Savings Account (HSA)

Individual Brokerage Account

Coverdell Education Savings Account

#11

What is the penalty for not having health insurance in the United States (as of 2023)?

5% of income

10% of income

Flat fee of $695 per adult

Flat fee of $1,000 per adult

#12

What is the contribution limit for a Traditional IRA in the United States for individuals under age 50 in tax year 2023?

$6,000

$7,000

$8,000

$9,000