CM 2.1B Federal Income Tax (Single)

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What is the federal income tax?

Back

A tax levied by the federal government on the income of individuals and businesses.

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What does 'single' mean in tax filing status?

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It refers to an individual who is not married and files their taxes independently.

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What are allowances in the context of federal income tax?

Back

Allowances are used to determine the amount of income tax withheld from an employee's paycheck.

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What is gross pay?

Back

The total amount of money earned by an employee before any deductions, such as taxes.

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What is net pay?

Back

The amount of money an employee takes home after all deductions, including taxes, have been subtracted from gross pay.

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How do you round a number to the nearest thousand?

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Look at the hundreds digit; if it is 5 or more, round up, otherwise round down.

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How do you round a number to the nearest ten?

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Look at the ones digit; if it is 5 or more, round up, otherwise round down.

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What is the purpose of payroll tables?

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Payroll tables provide a guide for employers to determine the amount of federal income tax to withhold from employees' paychecks.

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What is the significance of claiming allowances on a W-4 form?

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Claiming allowances affects the amount of federal income tax withheld from an employee's paycheck.

Front

What is the formula to calculate federal income tax withheld?

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Federal income tax withheld is calculated based on the employee's gross pay, filing status, and number of allowances.