FCS 233 1st Edition Exam #2 Study Guide Exam will be 40 questions and will relate to the items listed below.Chapter 41. Be able to recognize some of government services expected from taxes (recognize which is NOT on a M/C list)Court systems, Police, Fire Department, Public Schools, Public libraries, Road, Railroads, Airports, Social Program, Incentives for economy, Military, Food Safety/Inspections. 2. What are taxes taken directly from paychecks?Medicare3. When do we need to file income tax forms?April 15th4. What is the percent taken out for SS and Medicare?The Percentage taking out for SS is 12.4% and Medicare is 2.9%5. What are examples of license or fee taxes (recognize which is/not from a M/C list)Driver’s License, Fishing/Hunting/ Boat, Building Permit, Marriage License, License Plates, Dog tags6. What is a tax called that is “built into” the retail price?7. What are the Wealth/Property tax categories?Capital gain- if you sell assets that grew in value.Estate- paid on wealth of deceased peopleInheritance- may be owed if you are given a large gifProperty personal- cars, mobile homes, boats. Real Estate- property based on land/ home values, penalty/ fine taxes, Court fees, traffic fines, parking tickets. 8. What is an example of an “optional” tax?9. How many days a year do we have to work to pay our taxes? What is the day called when all are accounted for?These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.10. What should the tax freedom day have been based on what the governments are spending?Tax freedom day tells you if you pay taxes up front you would not get a check. 11. In 2009 about __47__% of Americans paid no income tax. Why was that?Because they had no jobs, not enough money and deductions12. What type of tax is a progressive tax – what is the tax we pay that best fits this?Progressive tax is one that increase with how much you make. Best example is federal income tax13. Why is my earned income different than my taxable income?14. How many tax brackets are there and what is the range in %?7 brackets at 39.6%15. A tax that takes more from a low earning citizen than a high earner is a _____ tax.16. What is the IL tax rate? What do we call this type of tax that is the same for all income levels?17. What is the tax called that is charged on an asset sold for a higher value than you paid for it?Capital Gain18. Be able to recognize in a M/C format the terms W-2, 1099, Exemption, deduction, Tax credit19. How many years should you keep most income tax information? How many years can IRS go back to audit?20. Real estate is assessed at what percent of value in most of IL?1/321. How much does an owner occupied exemption reduce an EAV?22. What do the EAV stand for?Equalize assets value23. Be able to calculate a tax amount, given the EAV and tax rate.Start with street value divide by 3Chapter 524. What are the 4 common mistakes in managing cashA. Overspending because of impulse and use of credit cardsB. Insufficient liquid assets to pay billsC. Using saving and barrowing for current expensesD. Failing to put funds in savings accounts or investment long term25. What is a trust?A trust is a legal agreement that can be set up to manage money for another party26. What is the difference between a debit card and a credit cardA debit card allow access to your own money in a bank account whereas credit card is barrowing money27. What is the difference between a bank, a savings and loan, and a credit union?A bank offers the broadest range of service including checking saving loans and other services. A savings bank is owned by depositors and specializes in savings and mortgages LoanCredit union is a user owned nonprofit cooperative financial institution. 28. What is used when you agree to place savings in a financial institution for a guaranteed period of time?Certificate of Deposit 29. What is the organization that backs banks to protect depositor monies?Fed Deposit Insurance Corp (FDIC)30. How much does it cost to buy a Patriot Bond with a face value of $1000? 25 TO 5000, cost is half the price. 31. What is the difference between a blank, restricted, and special endorsement?Blank endorsement is if the back of a check that is payableSpecial endorsement is when you want to transfer a check to someone else you write “Pay to the Order” of that person and sign it.Restrictive endorsement is when you want your check deposit but not cashed32. What is the process called to compare your checkbook balance with the bank each month called?33. What is the difference between a cashier’s check and a certified check?A Certified check is a personal check that has been guaranteed by a bank to insure its validity.A Cashier check is written from your account by the bank to insure the funds are there for a purchase. 34. What is an ACH process and why should I understand that as I write a check?Accelled Checking Help, it is a type of processes that speed up the withdrawal of funds from checking accountsChapter 9 - The Housing Decision35. Loan obtained to purchase land/buildings with property purchased is pledged as security is called a __Mortgage________.36. About _2/3________ of Americans own home 37. Some experts say to use the __3___ times annual household income guideline as your home price38. Others suggest __4__ times IF a __20___% down payment39. Some mortgages require total long-term payments (car, college, credit) not to exceed __36__% of income40. Some say monthly housing (P + I, Tax, Insurance) be equal or <_28___% of income, even without other debt41. Most commonly mortgages are usually __15___ year or __30___ year 42. A real estate salesperson in IL must be licensed by the __state_______.43. What is the common real estate commission paid to realtors? Who pays the fee?44. What does FSBO mean?For Sell By Owner45. When a realtor represents both the buyer and the seller it is called a __Dual_____ agency46. Why is it “good practice” to be bank “pre-certified” before making an offer?Do not look at homes outside your $$ capacity47. Who should you hire to check the physical condition of a home as you are buying?A license home inspector48. Banks usually require an _________ of the property if a loan is involved in buying a house.Home warranty49. Money paid with an “offer” is called “________” money and if offer is accepted $$