Tax Questions and Answers

Front

What is the purpose of taxes in a community?

Back

Taxes fund public services such as schools, roads, libraries, and community centers.

Front

Which item is typically not funded by taxes?

Back

Fast food restaurant.

Front

What is earned income?

Back

Money earned from working, such as a job at the mall.

Front

What is the Internal Revenue Service (IRS)?

Back

The agency responsible for collecting federal income taxes in the US.

Front

What is an example of unearned income?

Back

Interest earned on a savings account or money received from Social Security.

Front

How do state income taxes differ from federal income taxes?

Back

State income taxes are collected by individual states, while federal income taxes are collected by the national government.

Front

What is the significance of filing taxes?

Back

Filing taxes is required by law and helps determine how much tax you owe or if you will receive a refund.

Front

What is a tax refund?

Back

A tax refund is money returned to a taxpayer when they have overpaid their taxes.

Front

What is the difference between gross income and net income?

Back

Gross income is the total income before taxes and deductions, while net income is what you take home after taxes.

Front

What are property taxes?

Back

Taxes based on the value of owned property, such as homes or land.