Adjusted gross income $($AGI$)$ is basically your total income, less some items such as contributions to an IRA retirement plan.

True

False

Which of the following is correct about Social Security and Medicare taxes?

The $2024$ tax rate for social security is $6\mathrm{.}2\%$ for the employer and $6\mathrm{.}2\%$ for the employee, or $12\mathrm{.}4\%$ total.

The $2024$ rate for Medicare is $1\mathrm{.}45\%$ for the employer and $1\mathrm{.}45\%$ for the employee, or $2\mathrm{.}9\%$ total.

Employers are responsible for withholding the $0\mathrm{.}9\%$ Additional Medicare Tax on an individual's wages paid in excess of $$200,000($single$)$ or $$250,000($MFJ$)$ in a calendar year.

I

II

II and III

I, II$,$ and III

Owning your own business may allow you to deduct health and life insurance as business costs.

True

False

Which of the following is correct?

Joint filers, who is filing a joint tax return with your spouse, receive one of the largest standard deductions each year, allowing them to deduct a significant amount of income when calculating taxable income.

Itemized deductions are expenses a taxpayer is allowed to deduct from taxable incomes above AGI.

I

II

I and II

None

Which of the following is correct?

You need to retain physical proof of your income and expenses in case the IRS questions the accuracy of your tax return.

Professional tax preparers must be certified.

An employer sends each employee a Form W$-2$ at the end of each year, showing what taxes were withheld.

I and II

I and III

II and III

I, II$,$ and III

Which of the following is correct?

You may deduct any ordinary and necessary expenses related to starting and maintaining your business.

Child support payments have no tax consequences. They are neither deductible by the payer nor included in the recipient$$s income.

I

II

I and II

None

Which of the following is correct?

Municipal bonds are free from federal taxes and are often free from state taxes.

Contribution made to your individual retirement account $($IRA$)$ is tax$-$exempt.

I

II

I and II

None

Which of the following is correct?

The practice of misrepresenting income and expenses to avoid paying taxes is called tax savings.

The strategy of postponing payment of certain taxes until a more advantageous time is called tax deferral.

I

II

I and II

None

Which of the following is not correct?

Kiddie Tax does not apply if the child earned any salary or wages from working, that income is then taxed at the child$$s rate. However, kiddie tax will still apply to the child$$s unearned income if the requirements are met.

The unearned income for individuals under $18$ years and full$-$time students under $24$ years over the threshold is subject to be taxable at parents$$ marginal tax rate.

I

II

I and II

None

A taxpayer who is married with $$100,000$ of joint income in $2024$ and claiming the standard deduction of $$29,200$ owe $$12,726$ of total federal income taxes.

True

False