Econ: Unit 8

A state's sales tax is an example of a

??? not progressive tax

IRS collects?

???????not FICA tax

You received a $50,000 inheritance and placed it in a savings account. If you withdraw $10,000?

????not pay income tax on 10,000

A federal tax form issued by employers that shows how much an employee was paid in a year?

W-2

Which is not used by the IRS to collect taxes?

audits held in your home or office

If you sell your old car for more than you paid, the profit is subject to?

capital gains tax

The tax on gasoline is a(n)

excise tax

A common example of a local tax is a parking ticket?

false

you recently paid $50 to renew your driver's license. The $50 payment is considered a tax?

false

A system that applies the same tax rate to every taxpayer regardless of income bracket is a?

flat tax system

A regressive tax takes the largest percentage of income from which group?

low-income

Social Security tax is a(n)

payroll tax

The largest source of tax revenue for the federal government is

personal income tax

Which income tax structure is used in the United States?

progressive

Tax levied on your home is a (n)?

property tax

A flat tax is the same as a?

proportional tax

Tax that takes a larger percentage of a lower-income and a smaller percentage of a higher income is

regressive tax system

Tax on groceries is a (n)?

sales tax

The largest single item in the Fairfax County budget is?

schools

The largest single non-defense item in the federal budget is?

social security

Child care is a?

tax credit

Which of the following doesn't count as an itemized deduction on your income tax?

the cost of utilities like water and gas

Why do we pay taxes?

to raise money for the government

Social Security payment by the government is a (n)?

transfer payment

One key characteristic of a tax is that it is a required payment to a governmental agency.

true

Which is not an example of a person's income?

valuables

Who is responsible if your tax preparer makes a mistake on your tax return?

you, the taxpayer

What does IRS stand for?

Internal Revenue Service

Why is it not ideal to get a refund on your taxes each year?

It means you are having too much withheld, and you could instead earn interest on that money

Your parents gifted you $10,000 in cash. Which is true?

Neither party pays a gift tax

What is a progressive income tax system?

One in which the tax rate increases as the amount of taxable income increases

Which best describes Income tax?

Paid by businesses or individuals on money they make

Which best describes Sales tax?

Paid to state and local governments on purchased goods and services

Which best describes Property tax?

Paid to state or local governments based on the assessed value of property

Items that reduce the amount of income subject to taxes, such as home mortgages, are called?

Tax deductions

Form used to file Individual Income Tax Return

1040

Form used to report various types of income other than wages, salaries, and tips?

1099

What the difference between a tax deduction and a credit?

A tax credit directly lowers your tax bill, while a tax deduction lowers your taxable income, so the value depends on what tax bracket you fall into

Tax returns must be filed by?

APRIL 15