Cwmc Module 28: Taxes Competency Test
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This quiz is part of LFE Institute's CWMC (Certified Workplace Money Coaching) course. It will test your proficiency in the Taxes Module (Module 28) of the program. The questions are all multiple choice, and are designed to be a review of this Module. Let LFE know when you've successfully completed this test and are ready to begin the next Module. Correct answers required for passing grade: 9/10
- 1.Which of the following are strategies to help minimize taxes? (check all that apply)
- A.
Reduce income
- B.
Increase deductions
- C.
Take advantage of tax credits
- D.
Increase expenses
- 2.Which of the following can reduce the AGI on an income tax return? (check all that apply)
- A.
Health savings account deduction
- B.
Tuition and fees deduction
- C.
Contribution to an IRA
- D.
Student loan interest
- 3.Which of the following can directly reduce gross taxes on an income tax return? (check all that apply)
- A.
Credit for child and dependent care expenses
- B.
Retirement savings contributions
- C.
Education credits
- D.
Dividend interest
- 4.Which of the following best describes a professional tax advisor?
- A.
Person specifically trained to prepare tax returns
- B.
Certified Management Accountant
- C.
Financial expert specifically trained in tax law
- D.
Attorney at law
- 5.Investing in a 401(k) has a direct impact in which of the following areas? (check all that apply)
- A.
Amount of income taxes payable
- B.
Amount of disposable income available
- C.
Retirement earnings
- D.
Vacation fund
- 6.Which of the following is a tax scam recognized by the IRS?
- A.
Frivolous Arguments
- B.
Nigerian or 419 scams
- C.
Spanish prisoner scams
- D.
Scholarship scams
- 7.What is the number one error on income tax returns?
- A.
Overclaiming deductions
- B.
Overclaiming exemptions
- C.
Underreporting income
- D.
Addition errors
- 8.The following choices are all methods of converting a traditional IRA to a Roth IRA. Which of these methods are taxable? (check all that apply)
- A.
Rollover
- B.
Cash out and reinvest
- C.
Trustee-to-trustee transfer
- D.
Transfer fund through a company bank
- 9.Which of the following tax strategies can be used to increase take-home pay? (check all that apply)
- A.
Enroll in employer’s 401(k) plan
- B.
Reduce the number of exemptions taken
- C.
Increase the number of exemptions taken
- D.
Deposit funds into an IRA account
- 10.Who is required to sign on a married, filing jointly tax return prepared by a CPA?
- A.
Husband
- B.
Wife
- C.
Husband, wife, and CPA
- D.
Husband and wife
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