CM 2.1B Federal Income Tax (Single)

Front

What is federal income tax?

Back

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

Front

What does it mean to claim allowances on a W-4 form?

Back

Claiming allowances reduces the amount of federal income tax withheld from your paycheck.

Front

How do you calculate federal withholding using the percentage method?

Back

Multiply the taxable income by the applicable percentage based on the IRS withholding tables.

Front

What is the purpose of federal income taxes?

Back

To fund government services, including national defense, education, and infrastructure.

Front

What is the significance of rounding numbers in tax calculations?

Back

Rounding ensures that calculations are simplified and can affect the final amount withheld.

Front

If a person earns $350.15 weekly and claims one allowance, how much federal income tax is withheld?

Back

$30.

Front

What is the difference between federal income tax and state income tax?

Back

Federal income tax is collected by the national government, while state income tax is collected by individual states.

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What is the formula for calculating the amount of federal withholding?

Back

Federal Withholding = (Taxable Income - Allowances) x Tax Rate.

Front

What does it mean to round a number to the nearest whole number?

Back

It means adjusting the number to the closest integer value.

Front

What is the role of the IRS in federal income tax?

Back

The IRS (Internal Revenue Service) is the federal agency responsible for tax collection and enforcement of tax laws.