Income Tax Preparation
Chapter 1: Introduction to
Taxation, the Income Tax
Formula, and Form 1040
Notes fully solved & updated
The first personal income tax was enacted in 1861 to fund the __. -
answer Civil War
A(n) _ tax structure applies the same tax rate to all levels of income,
while a(n) _ tax structure applies higher tax rates as the tax base
increases and a(n) _ tax structure applies lower tax rates as the tax
base increases. - answer Proportional (Flat), Progressive,
Regressive
Which of the following taxes uses a progressive tax rate structure? -
answer Federal individual income tax
A sales tax is an example of a tax that uses a(n) _ tax rate structure
when compared to its tax base. - answer Proportional
The social security tax is an example of a(n) _ tax structure because
individuals do NOT incur this tax on earnings in excess of $142,800
(for 2021). - answer Regressive
Which of the following statements are correct regarding the history
of the U.S. personal income tax (choose all the correct answers)? -
answer -The income tax was once ruled unconstitutional.
, -The 16th Amendment to the U.S. Constitution gives Congress the
power to assess income tax on individuals.
The _ tax rate measures the average percentage of tax on only
taxable income. The _ tax rate indicates the rate of tax on the next
dollar of income. - answer Average, Marginal
Match the tax rate structure to its definition.
Instructions: - answer Progressive - Imposes an increasing marginal
rate as the tax base increases
Proportional - Imposes a constant tax rate across the tax base
Regressive - Imposes a decreasing marginal tax rate as the tax base
increases
income less allowable deductions is __. - answer Taxable Income
The federal individual income tax system in the United States uses
a(n) _ tax structure. - answer Progressive
Unemployment benefits are: - answer -Paid under a joint federal and
state system of unemployment insurance.
-Available to those who are unemployed through no fault of their
own.
Which of the following taxes uses a proportional tax rate structure?
- answer State sales tax
Amy and Ethan are married and file a joint return for 2021. Their
taxable income is $78,300. What is the amount of their tax liability,
using the tax tables in Appendix D, assuming they have no capital
gains or qualified dividends? - answer $9,001
Chapter 1: Introduction to
Taxation, the Income Tax
Formula, and Form 1040
Notes fully solved & updated
The first personal income tax was enacted in 1861 to fund the __. -
answer Civil War
A(n) _ tax structure applies the same tax rate to all levels of income,
while a(n) _ tax structure applies higher tax rates as the tax base
increases and a(n) _ tax structure applies lower tax rates as the tax
base increases. - answer Proportional (Flat), Progressive,
Regressive
Which of the following taxes uses a progressive tax rate structure? -
answer Federal individual income tax
A sales tax is an example of a tax that uses a(n) _ tax rate structure
when compared to its tax base. - answer Proportional
The social security tax is an example of a(n) _ tax structure because
individuals do NOT incur this tax on earnings in excess of $142,800
(for 2021). - answer Regressive
Which of the following statements are correct regarding the history
of the U.S. personal income tax (choose all the correct answers)? -
answer -The income tax was once ruled unconstitutional.
, -The 16th Amendment to the U.S. Constitution gives Congress the
power to assess income tax on individuals.
The _ tax rate measures the average percentage of tax on only
taxable income. The _ tax rate indicates the rate of tax on the next
dollar of income. - answer Average, Marginal
Match the tax rate structure to its definition.
Instructions: - answer Progressive - Imposes an increasing marginal
rate as the tax base increases
Proportional - Imposes a constant tax rate across the tax base
Regressive - Imposes a decreasing marginal tax rate as the tax base
increases
income less allowable deductions is __. - answer Taxable Income
The federal individual income tax system in the United States uses
a(n) _ tax structure. - answer Progressive
Unemployment benefits are: - answer -Paid under a joint federal and
state system of unemployment insurance.
-Available to those who are unemployed through no fault of their
own.
Which of the following taxes uses a proportional tax rate structure?
- answer State sales tax
Amy and Ethan are married and file a joint return for 2021. Their
taxable income is $78,300. What is the amount of their tax liability,
using the tax tables in Appendix D, assuming they have no capital
gains or qualified dividends? - answer $9,001
