Individual Income Tax
True/False
Interest income is taxable
True
What are the three types of taxes?
Proportional, progressive, and regressive
What percentage of your income should go to savings?
20%
An annual report to the IRS summarizing total income, deductions, and taxes withheld
Tax return
How many times a year do we file our taxes and when are they due?
once, April 15
What is a 1040?
U.S. Individual Income tax return
The three income taxes that could be found on your W-2 are...
Federal, State, and Local income taxes
Ability-to-pay
General tax levied on most consumer goods/purchases
sales tax
Your tax return is sent or transmitted to this organization
Internal Revenue Service (IRS)
What is the official name of the W-4?
Employee Withholding Certificate
Income tax in the U.S. is an example of this type of taxation
Progressive tax
What percent of your income should go to fixed expenses?
50%
a tax placed on the value that manufacturers add at each stage of production
Value-added tax
This is the largest source of Federal Revenues
Individual Income Tax
Your employer is responsible for sending you a copy of your W-2 by what date?
January 31st
What is the tax you pay on your house?
Who benefits more from the tax bracket system: a person with a lower income or higher income?
Lower income
Profits from the sale of an asset held for 12 months or more
Capital gains
How is the amount each person has to pay determined under the ability-to-pay principle?
it is dependent on income
Name 3 of the 9 states that do not impose an income tax
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming
What kind of tax funds Medicare?
Proportional Tax
A rule designed to prevent high-income earners from avoiding taxes by making them estimate their tax liability twice and then pay the higher amount
alternative-minimum tax
a relatively high tax designed to raise revenue while reducing consumption of a socially undesirable product such as liquor or tobacco
sin tax
This is the decrease in the value of currency