WGU C237 Taxation I Questions with Correct Answers 100% Verified By Experts| 2025/2026
Latest Update
Describe the history of taxation in the US 1861 - to finance civil war
1894 - Income tax reinstated but ruled unconstitutional 1895
1913 - 16th amendment
1940 - WWII mass tax
1943 - pay as you go withholding
1986 - Internal Revenue Code
Identify the sources of tax law Legislative Branch
- Internal Revenue Code (Top)
- Congressional Committee Reports
Executive
- Income Tax Regulations
- Revenue Rulings
- Revenue Procedures
- Letter Rulings
Judicial
- Court Decisions
Describe the criteria of an equitable tax structure Equity - equality
Certainty - Stability and certainty of amount of taxes
Convenience - no burden of records and compliance
Economy- minimal compliance and administrative costs
Simplicity - understandability
Describe the structure of individual income tax rates Progressive - tax increases as tax base
increases
, Proportional - flat tax
Regressive - decreases as tax base increases
Calculate an individuals federal income tax from his or her taxable income Total Income
- Exclusions
= Gross income
- Deductions
- Exemptions
= Taxable income
X tax rate
= Income tax before credits
- Tax Credits
= Total tax liabilty
- Prepayments
=Bal due or refund
Distinguish between various types of taxes State Tax
Local Income
Franchise Tax
Wealth transfer tax
Gift tax
Federal Estate tax
Property tax
Federal excise tax - customs
Sales Tax
Identify different types of entities that are subject to taxation in the US -Tax paying entities
Latest Update
Describe the history of taxation in the US 1861 - to finance civil war
1894 - Income tax reinstated but ruled unconstitutional 1895
1913 - 16th amendment
1940 - WWII mass tax
1943 - pay as you go withholding
1986 - Internal Revenue Code
Identify the sources of tax law Legislative Branch
- Internal Revenue Code (Top)
- Congressional Committee Reports
Executive
- Income Tax Regulations
- Revenue Rulings
- Revenue Procedures
- Letter Rulings
Judicial
- Court Decisions
Describe the criteria of an equitable tax structure Equity - equality
Certainty - Stability and certainty of amount of taxes
Convenience - no burden of records and compliance
Economy- minimal compliance and administrative costs
Simplicity - understandability
Describe the structure of individual income tax rates Progressive - tax increases as tax base
increases
, Proportional - flat tax
Regressive - decreases as tax base increases
Calculate an individuals federal income tax from his or her taxable income Total Income
- Exclusions
= Gross income
- Deductions
- Exemptions
= Taxable income
X tax rate
= Income tax before credits
- Tax Credits
= Total tax liabilty
- Prepayments
=Bal due or refund
Distinguish between various types of taxes State Tax
Local Income
Franchise Tax
Wealth transfer tax
Gift tax
Federal Estate tax
Property tax
Federal excise tax - customs
Sales Tax
Identify different types of entities that are subject to taxation in the US -Tax paying entities
