Test your tax knowledge

Published Jan 25, 2021
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  A woman tests her tax knowledge on her laptop at the kitchen table.

When it comes to filing your taxes, how confident are you that you understand the process and know how to complete your tax return? Take this quiz to see how tax smart you are.

  1. True or False: If I lost my job, I don't have to pay taxes.

  2. True or False: I bought my first home in 2020, so I'll get a tax break.

  3. True or False: I had a baby in 2020, so I'll get a tax break.

  4. True or False: It's not a big deal if I use my nickname on my tax return.

  5. True or False: I always take the standard deduction because it will give me the best possible return.

Answers:

  1. False. Unfortunately, if you lost your job, in addition to paying tax on other income you may have received throughout the year, you may still have to pay taxes on any earned wages you received before the job loss and unemployment benefits. However, you may be able to deduct some job-search expenses like transportation to interviews or recruiter fees.
     
  2. True, depending on if you itemize or take the standard deduction. Homeowners have access to certain tax deductions that don't apply to renters. For example, if you itemize, you may get deductions for mortgage interest and real estate taxes you pay.
     
  3. True. Expanding your family may provide you a tax break. You may be eligible for the Child Tax Credit of up to $2,000 for children up to age 16. A smaller credit of $500 is available for children ages 17-18 and full-time students, ages 19-24.
     
  4. False. Unless your nickname is on your Social Security card, you'll have to use your legal name. The name on your return must match the name on your card exactly.
     
  5. False. It depends. How you complete your tax return is personal to you – you should review your situation to decide if the standard deduction is best or if itemizing would benefit you. Your tax professional can help.
Important Information:

Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation.