FICEP Exam Questions with Correct Answers

FICEP Exam Questions with Correct Answers Select the statement that correctly describes a progressive tax. - Answer-A progressive tax requires people to pay more as they earn more. What is the name of the organization that offers free tax assistance to taxpayers age 60 or older, those with disabilities or special needs, or who qualify for earned income or homestead tax credits? - Answer-Tax Counseling for the Elderly (TCE) What percent of tax payers are eligible to use the "Free File Online" service offered as a partnership between the IRS and tax software companies? - Answer-70% are eligible When members use tax refunds to pay down debts, which debts should be paid first? - Answer-Always pay the debts with high interest rates or that could prompt garnishments. Which type of qualified IRA withdrawal is exempt from income tax? - Answer-Roth IRA withdrawals are exempt. Which group of taxpayers usually qualifies for the Earned Income Tax Credit (EITC)? - Answer-Low-income families with earned income qualify for the credit. These six expenses are typically accepted by the IRS as itemized deductions: - Answer-Traditional IRA contributions, alimony payments, real estate taxes paid, state and local income taxes, mortgage interest, and casualty and theft losses. What is the meaning of the insurance practice "pooling of risks"? - Answer-Combining risks among insurers as well as groups of individuals. How did the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 impact employee health benefits? - Answer-It gave employees the right to retain health insurance after their job ends by paying the full premium.