Introduction To Personal Taxation And Types Of
Taxes - Questions With Complete Solutions
Sales tax Correct Answer - A tax imposed by state and local
governments on the sale of goods and services.
Property tax Correct Answer - A tax based on the value of the property
owned, which varies by county and state.
Payroll tax Correct Answer - A tax imposed on wages and salaries to
fund Social Security and Medicare.
Income tax Correct Answer - A financial obligation imposed on
individuals and businesses based on their income.
Gross Income Correct Answer - The amount earned pre-tax.
Withholdings Correct Answer - Money withheld from paycheck for the
purpose of paying taxes.
Social Security Tax Correct Answer - A mandatory withholding of 7.65%
of employee income, matched by the employer.
Medicare Tax Correct Answer - A mandatory withholding of 7.65% of
employee income, matched by the employer.
Federal Income Tax Correct Answer - A tax on income imposed by the
federal government.
Sales Tax Rate Correct Answer - The percentage of sales tax applied,
which varies by city, county, and/or state.
Tax Base Correct Answer - The price of the item used to calculate sales
tax.
Tax Rate Correct Answer - The sales tax expressed in decimal form.
, Ad Valorem Taxes Correct Answer - Car tax based on the value of the
vehicle.
Flat Taxes Correct Answer - A tax system where all wage earners are
taxed at the same rate.
Regressive Taxes Correct Answer - A tax system where lower income
earners are taxed at a higher rate than higher income earners.
Progressive Taxes Correct Answer - A tax system where higher income
households are taxed at a higher rate than lower income households.
Federal Deficit Correct Answer - A situation where federal expenditures
exceed federal income.
Federal Surplus Correct Answer - A situation where federal
expenditures are less than federal income.
Internal Revenue Service (IRS) Correct Answer - The federal agency
responsible for collecting taxes and enforcing tax laws.
Tax Return Process Correct Answer - The procedure where employers
and banks report information to the IRS about their clientele.
Adjusted Gross Income (AGI) Correct Answer - Gross income minus
deductions for adjusted gross income.
Deductions for AGI Correct Answer - Deductions applied to total gross
income to calculate AGI.
Deductions from AGI Correct Answer - Deductions applied to AGI to
reduce taxable income.
Standard Deduction Correct Answer - A deduction set by Congress that
takes inflation into account and usually increases yearly.
Itemize Deductions Correct Answer - Deductions that exceed the
standard deduction amount, used to reduce AGI.
Taxes - Questions With Complete Solutions
Sales tax Correct Answer - A tax imposed by state and local
governments on the sale of goods and services.
Property tax Correct Answer - A tax based on the value of the property
owned, which varies by county and state.
Payroll tax Correct Answer - A tax imposed on wages and salaries to
fund Social Security and Medicare.
Income tax Correct Answer - A financial obligation imposed on
individuals and businesses based on their income.
Gross Income Correct Answer - The amount earned pre-tax.
Withholdings Correct Answer - Money withheld from paycheck for the
purpose of paying taxes.
Social Security Tax Correct Answer - A mandatory withholding of 7.65%
of employee income, matched by the employer.
Medicare Tax Correct Answer - A mandatory withholding of 7.65% of
employee income, matched by the employer.
Federal Income Tax Correct Answer - A tax on income imposed by the
federal government.
Sales Tax Rate Correct Answer - The percentage of sales tax applied,
which varies by city, county, and/or state.
Tax Base Correct Answer - The price of the item used to calculate sales
tax.
Tax Rate Correct Answer - The sales tax expressed in decimal form.
, Ad Valorem Taxes Correct Answer - Car tax based on the value of the
vehicle.
Flat Taxes Correct Answer - A tax system where all wage earners are
taxed at the same rate.
Regressive Taxes Correct Answer - A tax system where lower income
earners are taxed at a higher rate than higher income earners.
Progressive Taxes Correct Answer - A tax system where higher income
households are taxed at a higher rate than lower income households.
Federal Deficit Correct Answer - A situation where federal expenditures
exceed federal income.
Federal Surplus Correct Answer - A situation where federal
expenditures are less than federal income.
Internal Revenue Service (IRS) Correct Answer - The federal agency
responsible for collecting taxes and enforcing tax laws.
Tax Return Process Correct Answer - The procedure where employers
and banks report information to the IRS about their clientele.
Adjusted Gross Income (AGI) Correct Answer - Gross income minus
deductions for adjusted gross income.
Deductions for AGI Correct Answer - Deductions applied to total gross
income to calculate AGI.
Deductions from AGI Correct Answer - Deductions applied to AGI to
reduce taxable income.
Standard Deduction Correct Answer - A deduction set by Congress that
takes inflation into account and usually increases yearly.
Itemize Deductions Correct Answer - Deductions that exceed the
standard deduction amount, used to reduce AGI.
