Quiz 4: Tax Essentials

Question 1: What is a W-2 form used for?

a) Reporting self-employment income

b) Reporting employee wages and taxes withheld

c) Applying for a tax refund

d) Calculating investment gains

Question 2: What is a tax deduction?

a) Money paid directly to the government

b) An amount that reduces your taxable income

c) A credit that reduces your tax bill dollar-for-dollar

d) A penalty for late filing

Question 3: Which of these events might qualify you for a tax credit?

a) Buying a new car

b) Having a baby

c) Going on vacation

d) Buying new clothes