Taxation of individuals & Business
Entities Chapter 1 with correct question
and answers
usr
[COMPANY NAME] [Company address]
, 1. Which of the following common decisions would most likely
NOT be influ- enced by the United States income tax laws? Answer:
choosing a vacation location
2. tax Answer: is a payment required by a government that is unrelated to any specific benefit or
service received from the government
-fund operations of the government (raise revenue)
-not intended to punish or prevent illegal behavior
-encourages charitable contributions, retirement savings, and research and development
3. sin taxes Answer: impose relatively high surcharges on alcohol and tobacco products
4. key components of the definition of a tax are the payment is
Answer: Answer: -required (it is not voluntary)
-imposed by a government agency (federal, state, or local)
-not tied directly to the benefit received by the taxpayer
5. earmarked tax Answer: a tax that is assessed for a specific purpose
-the payment made by the taxpayer does not directly relate to the specific benefit received by the taxpayer
6. tax equals the tax base multiplied by the tax rate Answer: tax = tax
base * tax rate
7. what is the general purpose of a tax Answer: to fund the operations of the
government
8. Bill and Meredes file a joint tax return. They have $160,000 of
taxable income this year (after all tax deductions). Assuming the
following federal tax rate schedule applies, how much federal income
tax will they owe this year? Answer: tax bracket is $9,086 at 22% of taxable
income in excess of $78,950
Bill and Mercedes will owe $26,917 computed as
= $9,086 + 22% (160,000-78,950)
9. tax base Answer: defines what is actually taxed and is usually expressed in monetary terms
10. tax rate Answer: determines the level of taxes imposed on the tax base and is usually
expressed as a percentage
11. flat tax Answer: a single tax applied to an entire base
12. graduated taxes Answer: taxes in which the tax base is divided into a series of
monetary amounts, or brackets, where each successive bracket is taxed at a ditterent (gradually
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Entities Chapter 1 with correct question
and answers
usr
[COMPANY NAME] [Company address]
, 1. Which of the following common decisions would most likely
NOT be influ- enced by the United States income tax laws? Answer:
choosing a vacation location
2. tax Answer: is a payment required by a government that is unrelated to any specific benefit or
service received from the government
-fund operations of the government (raise revenue)
-not intended to punish or prevent illegal behavior
-encourages charitable contributions, retirement savings, and research and development
3. sin taxes Answer: impose relatively high surcharges on alcohol and tobacco products
4. key components of the definition of a tax are the payment is
Answer: Answer: -required (it is not voluntary)
-imposed by a government agency (federal, state, or local)
-not tied directly to the benefit received by the taxpayer
5. earmarked tax Answer: a tax that is assessed for a specific purpose
-the payment made by the taxpayer does not directly relate to the specific benefit received by the taxpayer
6. tax equals the tax base multiplied by the tax rate Answer: tax = tax
base * tax rate
7. what is the general purpose of a tax Answer: to fund the operations of the
government
8. Bill and Meredes file a joint tax return. They have $160,000 of
taxable income this year (after all tax deductions). Assuming the
following federal tax rate schedule applies, how much federal income
tax will they owe this year? Answer: tax bracket is $9,086 at 22% of taxable
income in excess of $78,950
Bill and Mercedes will owe $26,917 computed as
= $9,086 + 22% (160,000-78,950)
9. tax base Answer: defines what is actually taxed and is usually expressed in monetary terms
10. tax rate Answer: determines the level of taxes imposed on the tax base and is usually
expressed as a percentage
11. flat tax Answer: a single tax applied to an entire base
12. graduated taxes Answer: taxes in which the tax base is divided into a series of
monetary amounts, or brackets, where each successive bracket is taxed at a ditterent (gradually
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