Jul 26, 2012 2 min read

Quiz: Are You Tax Savvy?

Telling Tips is a series of articles from local experts to help you save money, make better decisions and plan for a better future.

We’re going to change things up a bit this week, with a little quiz to test your tax knowledge. Good luck!

Which would you rather have?
A tax credit of $150
A work related deductible expense of $150
A business loss of $150
A stock loss of $150
Which of the following may not be taxable?
A year-end bonus of $200
Unemployment compensation of $200
Social Security benefits of $200
Alimony received of $200
Which of these is not deductible?
Expenses in looking for a new job
An old car you give to charity
Your tax preparation fee
Interest on your personal credit card
Which of these is not a deductible medical expense?
Transportation, including tolls, to and from the doctor
Dues to the gym for doctor-prescribed swimming exercises for your arthritis
Long-term care premiums
Life insurance premiums
Which of these is true concerning an IRS audit?
It means I have done something wrong
Can only be held at the local IRS office
Will require proof of some deduction or income
Will happen if I ask for an extension to file my taxes
Which of the following is true about the new health care law?
When I sell my single-family primary residence, where I have lived for more than two years, tax is due no matter what my profit
For 2013, un-reimbursed medical expenses will be deductible by taxpayers under age 65 only to the extent they exceed 10 percent of adjusted gross income (AGI) for the tax year
The value of the employee’s health insurance coverage paid by my employer that will be shown on my W-2 for 2012 will be included in my taxable income
The new tax will also be on retirement income like 401(k)s and IRAs, as well as social security income, life insurance proceeds, and municipal bond interest
Which of the following is false?
If I omit 25 percent or more of gross income from my tax return, the government will audit me
If I forgot to write-off a worthless stock loss, I have seven years to file an amended tax return
Generally I have three years to file an amended return after I filed the original
If I tell the IRS I lost my records, they will just believe me, and close the audit
Which of the following is true?
The cost of raffle tickets, bingo games, or tickets for other types of lotteries organized by charities are deductible
If your credit card debt is cancelled, that amount is taxable even if you were insolvent immediately before the cancellation, or you were in bankruptcy
The legal fees you pay to an attorney to collect tax-free damages for physical injury or sickness are deductible
If you received a state and local tax refund, it is only taxable if (1) you claimed the tax paid as an itemized deduction, and (2) only to the extent that your itemized deductions exceeded your standard deduction

Answers below…

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Answers:

Quip: There are no new sins; the old ones just get more publicity.

Have a good week.

Joseph Reisman, of Joseph S. Reisman & Associates, has been serving tax prep and business accounting expertise from his Coney Island Avenue office for more than 25 years. Check out the firm’s website.