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
