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1 FiCEP CUNA FINAL EXAM ACTUAL EXAM COMPLETE 250
QUESTIONS AND CORRECT DETAILED ANSWERS
ALREADY GRADED A+
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. 1 / 4
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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.
Which statement accurately describes options for reducing income taxes? - ANSWER-Tax exemptions, deductions, and credits all help reduce income taxes.
Which group of taxpayers usually qualifies for the Earned Income Tax Credit (EITC)? - ANSWER- Low-income families with earned income qualify for the credit. 2 / 4
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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 first step financial counselors can take to determine whether a member is properly managing their taxes? - ANSWER-Review the member's payroll stub.
What is the meaning of the insurance practice "pooling of risks"? - ANSWER-Combining risks among insurers as well as groups of individuals.
What is an insurable interest? - ANSWER-The policyholder's monetary interest in the insured property.
From the perspective of your financial well-being, what is the best way to decide whether or not you should insure a particular item? - ANSWER-Consider the risk to your assets.
Select the correct description for the "elimination period". - ANSWER-How long a person must be disabled before they are eligible for benefits.
When does Workers' compensation provide benefits to workers? - ANSWER-When the worker has a work-related illness or injury. 3 / 4
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In addition to administrative costs, litigation, and third-party payments, what two factors have significantly contributed to rising health insurance costs? - ANSWER-The rising cost of medical technology, as well as the fact that people are living longer.
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.
If a member decides to purchase long-term care insurance, when is the best time to obtain a policy? - ANSWER-Sign up while they are still in good health so carriers will accept you.
What types of insurance policies should be avoided by most members? - ANSWER-Policies which offer coverage only in very specific conditions, making it hard to qualify for benefits.
Which group of people is most likely to purchase HO-4, or "contents coverage"? - ANSWER- Renters
How can a policyholder obtain additional insurance protection for items such as antiques or guns that might otherwise have only limited insurance reimbursement for theft or loss due to policy limits? - ANSWER-Purchase a schedule policy rider, or "schedule" the items.
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