Chapter 26 Test Review

Test Multiple Choice, T/F, Matching (2) 1040 forms

Question 1 What is Adjusted Gross Income?  your after-tax income  your taxable income after deductions  your taxable income before deductions C. your taxable income before deductions

Question 2 Which form tells your employer all they need to know about your tax-related allowance information?  W-2  W-4  W-10 W-4

Question 3 The process by which the expenses of government are paid is called……….. TAXATION

Question 4 A _____is a required contribution of money people make to government. tAX

Question 5 The main purpose of taxation is to raise…. revenue

Question 6 A tax for which the same rate applies regardless of income FLAT

Question 7 A type of tax commonly paid on such items as gasoline and tires EXCISE

Question 8 What is the deadline for filing tax forms? April 1 April 15 April 15 equals doomsday for many Americans. Don’t fret! You may get an extra day or two if the 15th falls on the weekend.

Tax paid on items purchased. Tax paid on salary, wages, and tips. Income tax Payroll tax Sales tax Excise tax Estate tax Inheritance tax Gift tax   Tax paid on items purchased. Sales Tax paid on salary, wages, and tips. Income Tax paid by both employee and employer. Tax paid on such items as tires and gasoline. Excise

Tax taken out of each person’s share of the will. Income tax Payroll tax Sales tax Excise tax Estate tax Inheritance tax Gift tax   Tax taken out of each person’s share of the will. Inheritance Tax paid to support Social Security. Payroll Tax paid on money or property given by others. gift Tax paid by businesses on their profits. Income Tax paid on the value of a deceased person’s property. Estate

Other…. Are Taxes Compulsory or optional? Are income taxes a Direct or Indirect tax? Direct more on direct Does every individual have to pay income taxes? no Does every corporation have to pay income taxes?

Is the federal income tax graduated or flat? What is 1 reason someone would not be able to use the 1040 form ONLY?

Direct Taxes are the taxes that are levied on the income of individuals or organizations. (Income tax, corporate tax, inheritance tax are some instances of direct taxation.) Indirect taxes are those paid by consumers when they buy goods and services.