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CUNA TEST Part 2, Module 1
Terms in this set (35)
Why are gov. fees and surcharges sometimes described as a form of tax?
Because they generate income for the government.
How do taxes impact personal spending?
taxes can make your personal spending go up or down.
When is the IRS most likely to impose the maximum penalty on taxpayers?
When it is 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?
Never assume the IRS is always correct.
What happens when taxpayers who file a late return for any or all of the 4 most recent tax ears are owed a refund?
No penalty is charged and the taxpayer gets the full refund amount.
Same tax rate regardless of income
What percent of taxpayers are eligible to use the 'Free File Online" service offered as a partnership between the IRS and tax software companies?
How have education, information, and direct deposit programs impacted taxpayers' use of refund anticipation loans.
The use of refund anticipation loans is decreasing.
Volunteer Income Tax Assistance
Taxable Income Rule of thumb
If you benefit financially, then you're taxed for it.
How do different tax authorities treat items excluded from federal taxable income?
Exclusions vary from state to state
What is the first step to effectively managing income taxes?
determining your filing status
What should be the goal of managing a taxpayer's income tax withholding?
To maintain cash flow while avoiding a tax bill at filing time.
What happens to year-end balances "left over" in section 125 or health savings accounts (HSAs)
Section 125 balances are forfeited, while HSA balances are rolled over.
Six expenses that IRS accept as deductions
Traditional IRA contributions, alimony payments, Real estate taxes paid, state and local income taxes, casualty and theft losses
What is the first step financial counselors can take to determine whether a member is properly managing their taxes?
Review payroll stub
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 an item?
Consider the risk to your assets
Select the correct description for the elimination period.
How long a person must be disabled before they get benefits.
What did the Consolidated Omnibus Budget Reconciliation Act (COBRA) establish?
It gave employees the right to retain health insurance after their job ends by paying the full premium
Who gets Content Coverage
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?
Purchase a schedule policy rider, or "schedule" the items
What is a possible consequence of ignoring exclusions to a homeowner's policy?
The policy may not pay for a claim.
With standard property insurance, how much of the cost of replacing property is typically covered?
Which statement best defines comprehensive and collision insurance coverage for vehicles?
Collision is for accidents and comprehensive is for any forms of damage or theft
What type of protection is provided by an umbrella liability policy?
It protects homeowners and vehicle owners from lawsuits
Which groups have the greatest need for life insurance
Wage earners with dependents
Select the correct definition for the "death benefit" of a life insurance policy.
The amount paid if the insured person dies
Why is a term life policy often a good choice for members with financial obligations who are struggling with a tight budget?
It's the most affordable
Why should you not drop a whole life policy?
Whole life policies usually have cash value, or surrender options.
Which of the following riders provides benefits to a member who becomes disabled?
A premium waiver for a disability rider covers premiums while a member is disabled
What is "the rule of 72" used to determine?
The number of months required to double the investments: 72 divided by the current interest rate
What is the rate of return
The percentage gain in value on your investment
Which investment vehicle has traditionally had the highest rate of return?
Common stocks over the last 50 years
What should the financial counselor consider when making referrals to a specific investment advisor>
The investment advisor's compensation, professional designation, and training
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