CM 2.1A Federal Income Tax Married

Front

What are tax brackets?

Back

Tax brackets are ranges of income that are taxed at specific rates. As your taxable income increases, you move into higher tax brackets, which means you pay a higher percentage of tax on the income within that bracket.

Front

What is net pay?

Back

Net pay is your take-home pay after all taxes and deductions have been subtracted from your gross income.

Front

How do you round 1.823 to the nearest whole number?

Back

1.823 rounded to the nearest whole number is 2.

Front

How do you round 43.827 to the nearest hundredth?

Back

43.827 rounded to the nearest hundredth is 43.83.

Front

If someone earns $1,352.75 weekly, married, and claims 1 allowance, what is their federal tax?

Back

The federal tax for this scenario is $156.00.

Front

What is the purpose of tax credits?

Back

Tax credits reduce the amount of tax owed, directly lowering your tax bill.

Front

What is the difference between gross income and net income?

Back

Gross income is the total income earned before any deductions, while net income is the amount left after taxes and other deductions.

Front

What does it mean to claim an allowance on your tax return?

Back

Claiming an allowance on your tax return reduces the amount of income that is subject to withholding tax, potentially increasing your take-home pay.

Front

What is a tax refund?

Back

A tax refund is the amount of money returned to you by the government if you have overpaid your taxes during the year.

Front

What is the significance of filing status in federal income tax?

Back

Filing status determines the tax rates and standard deductions you are eligible for, affecting your overall tax liability.