Types of Taxes Practice Exam Questions And Well Elaborated Answers.
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Module
TAX.
Institution
TAX.
Income Tax - correct answer Income Tax This is a tax levied on net personal or business income. Usually levied at a marginal tax rate which has different tax brackets depending on what level of income you produce. Businesses pay taxes on net income
Gross inco...
Income Tax - correct answer Income Tax This is a tax levied on net personal or
business income. Usually levied at a marginal tax rate which has different tax brackets depending on
what level of income you produce. Businesses pay taxes on net income
Gross income - correct answer Gross income includes all of the income your
business earns during the year
Net Income - correct answer Net income includes only the profit your business
earns after you subtract business expenses and other allowable deductions (includes payroll taxes) from
your gross income .
IRS - correct answer Internal Revenue Service (IRS), a bureau of the U.S. Treasury
Department, collects federal income taxes and enforces the Internal Revenue Code. It collects more
than $2.4 trillion from approximately 234 million individual and business tax returns a year.
Ways individual income taxes are paid - correct answer Withholding Taxes,
Estimated Tax payments, and Income Tax returns
Witholding Taxes - correct answer Money that is taken out of a person's paycheck
each pay period that must be paid to the government by an employer, on a quarterly basis.
Estimated tax payments - correct answer Money that must be paid quarterly,
generally by self-employed individuals whose taxes are not withheld by an employer.
Income tax return - correct answer Money that must be paid by an individual by
April 15 of each year, on income from the preceding year, along with the filing of all individual income
tax return forms.
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