Types of Taxes

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What is sales tax?

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Sales tax is a tax imposed on the sale of goods and services, usually calculated as a percentage of the purchase price.

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How do you calculate sales tax?

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To calculate sales tax, multiply the price of the item by the sales tax rate (as a decimal). For example, if an item costs $50 and the sales tax is 7%, the sales tax is $50 x 0.07 = $3.50.

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What is federal income tax?

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Federal income tax is a tax levied by the federal government on the income earned by individuals and businesses.

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How is federal income tax calculated?

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Federal income tax is typically calculated as a percentage of an individual's taxable income, which can vary based on income brackets.

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What is state income tax?

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State income tax is a tax imposed by individual states on the income earned by residents and businesses within that state.

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What is payroll tax?

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Payroll tax is a tax that employers withhold from employees' wages to fund social security and Medicare.

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What is the difference between sales tax and income tax?

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Sales tax is charged on purchases of goods and services, while income tax is charged on the income earned by individuals and businesses.

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What is property tax?

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Property tax is a tax based on the value of owned property, such as land and buildings, usually paid to local governments.

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If an item costs $40 and the sales tax is 8%, how much is the total cost?

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Total cost = Item cost + Sales tax = $40 + ($40 x 0.08) = $40 + $3.20 = $43.20.

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If Jillian earns $900 and pays $15 in federal income tax for every $100 earned, how much tax does she pay?

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Jillian pays $135 in federal income tax on her earnings of $900.