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FiCEP Final CUNA Review Questions and answers
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FiCEP Final CUNA Review Questions and answers
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FiCEP Final : CUNA ReviewQuestions and answers
Select the statement that correctly describes a progressive tax. -
answer A progressive tax requires people to pay more as they earn
more.
Pick the statement that best describes a regressive tax. - answer A
regressive tax charges the same tax rate regardless of the
taxpayer's income.
Why are government fees and surcharges sometimes described as a
form of tax? - answer Because they generate income for the
government.
Which taxing authorities are worthy of the member's attention? -
answer The member must attend to all tax authorities at all levels of
government to maintain their financial well-being.
How do taxes impact your personal spending? - answer Taxes can
make personal spending go up or down.
Which is larger: the penalty for failing to pay federal income taxes
on time, or the penalty for failing to file a tax return when taxes are
owed? - answer The penalty for failing to file a tax return is
significantly higher.
What is the right attitude to take toward taxes to protect your
financial well-being? - answer Taxes are an essential financial
responsibility.
,When is the IRS most likely to impose the maximum penalty on
taxpayers? - answer When they are forced to track down the
taxpayer.
What is a good rule to follow when dealing with a tax auditor or
another issue involving the IRS? - answer Never assume the IRS is
always correct.
What is the financial counselor's role in aiding members with
complex tax issues? - answer The counselor provides basic
information and refers members to tax programs or tax experts.
What happens when taxpayers who file a late return for any or all of
the 4 most recent tax years are owed a refund? - answer No penalty
is charged and the taxpayer gets the full refund amount.
What tax services are provided by the Volunteer Income Tax
Assistance (VITA) program? - answer Free tax return assistance to
low- or moderate-income taxpayers.
What benefit is offered when VITA services are combined with credit
union programs that encourage taxpayers to open accounts for
direct deposit of tax refunds? - answer Direct deposit reduces the
time required to get a refund, which counters the appeal of refund
anticipation loans.
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.
How have education, information, and direct deposit programs
impacted taxpayers' use of refund anticipation loans? - answer The
use of refund anticipation loans is decreasing.
What rule of thumb should be used when defining taxable income? -
answer If you benefit financially, you are likely to be taxed for it.
Which type of qualified IRA withdrawal is exempt from income tax? -
answer Roth IRA withdrawals are exempt.
How do different tax authorities treat items excluded from federal
taxable income? - answer Exclusions vary from state to state.
What is the first step for effectively managing income taxes? -
answer Determining your filing status.
What should be the goal of managing a taxpayer's income tax
withholding? - answer To maintain cash flow while avoiding a tax bill
at filing time.
What happens to year-end balances "left over" in Section 125 plans
or health savings accounts (HSAs)? - answer Section 125 balances
are forfeited, while HSA balances are rolled over
How much can a member in the 25% tax bracket save in federal
income taxes by depositing pre-tax income into tax-deferred
retirement accounts, such as traditional IRAs? - answer One-fourth
of the deposit.
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