FICEP STUDY EXAM QUESTIONS & ANSWERS 2024/2025
Select the statement that correctly describes a progressive tax. - ANSWERSA 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 ...
FICEP STUDY EXAM QUESTIONS & ANSWERS 2024/2025
Select the statement that correctly describes a progressive tax. - ANSWERSA 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? - ANSWERSTax 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? - ANSWERS70% are eligible
When members use tax refunds to pay down debts, which debts should be paid first? - ANSWERSAlways pay the debts with high interest rates or that could prompt garnishments.
Which type of qualified IRA withdrawal is exempt from income tax? - ANSWERSRoth IRA withdrawals are exempt.
Which group of taxpayers usually qualifies for the Earned Income Tax Credit (EITC)? - ANSWERSLow-
income families with earned income qualify for the credit.
These six expenses are typically accepted by the IRS as itemized deductions: - ANSWERSTraditional 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"? - ANSWERSCombining risks among insurers as well as groups of individuals.
How did the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 impact employee health benefits? - ANSWERSIt gave employees the right to retain health insurance after their job ends by paying the full premium. Under standard property insurance plans, how much of the cost of replacing property is typically covered? - ANSWERS80%
Which statement best defines comprehensive and collision insurance coverage for vehicles? - ANSWERSCollision is for accidents and comprehensive is for other forms of damage and theft.
What type of protection is provided by an umbrella liability policy? - ANSWERSIt protects homeowners and vehicle owners from lawsuits.
Which statement accurately describes features of term insurance and whole life insurance? - ANSWERSWhole life policies build cash value and policy settlement options.
Why should a member never simply drop a whole life insurance policy? - ANSWERSWhole life policies usually have cash value, or surrender options.
What is the "rule of 72" used to determine? - ANSWERSThe number of years required to double the investment: 72 divided by the current interest rate.
What is the rate of return? - ANSWERSThe percentage gain in value on your investment.
If you drop your thermostat by one degree, how much will it cut your heating costs? - ANSWERS3%
In order to make a cost-effective car purchase, what should you consider before buying? - ANSWERSYou should consider the car's cost to buy, cost to maintain, ability to meet your needs, and resale value.
What are some potential disadvantages of leasing a car? - ANSWERSLeases sometimes allow dealers to charge additional fees for exceeding the contract's mileage or causing high "wear and tear" on the card.
What is an advantage of prepaid cellphone plans? - ANSWERSPrepaid pay-as-you-go plans are better for people with low credit ratings.
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