MCGRAW HILLS TAXATION OF
INDIVIDUALS AND BUSINESS ENTITIES
COMPREHENSIVE EXAM SCRIPT VERIFIED
QUESTIONS AND SOLUTIONS GRADED
APLUS
●● 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
●● sin taxes
Answer: impose relatively high surcharges on alcohol and tobacco
products
●● key components of the definition of a tax are the payment is:
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
, ●● 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
●● tax equals the tax base multiplied by the tax rate
Answer: tax = tax base * tax rate
●● what is the general purpose of a tax
Answer: to fund the operations of the government
●● 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)
●● tax base
Answer: defines what is actually taxed and is usually expressed in
monetary terms
INDIVIDUALS AND BUSINESS ENTITIES
COMPREHENSIVE EXAM SCRIPT VERIFIED
QUESTIONS AND SOLUTIONS GRADED
APLUS
●● 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
●● sin taxes
Answer: impose relatively high surcharges on alcohol and tobacco
products
●● key components of the definition of a tax are the payment is:
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
, ●● 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
●● tax equals the tax base multiplied by the tax rate
Answer: tax = tax base * tax rate
●● what is the general purpose of a tax
Answer: to fund the operations of the government
●● 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)
●● tax base
Answer: defines what is actually taxed and is usually expressed in
monetary terms
