Ch. 2-3 State & City Income Taxes

Which term describes a tax rate that does not change with respect to an employee's income level?

• flat

• rigid

• variable

• steady

In a graduated tax system,

• the tax rate stays the same regardless of taxable income.

• the tax rate gets lower as taxable income gets larger.

• the tax rate gets higher as taxable income gets smaller.

• the tax rate gets higher as taxable income gets larger.

Which of the following statements about state and city income taxes is true?

• State and city income taxes never use a flat tax rate.

• If you owe federal income tax, you are not responsible for state or city income tax.

• State and city income tax is based on your federal taxable income.

• If you live in a city that charges income tax, you will not owe state income tax.

When the tax rate does not change with respect to the amount of income it is a flat tax.

• True

• False

In a graduated tax system, the tax rate gets LOWER as the taxable income gets LARGER.

• True

• False

An employee had federal taxable income of $57,984 last year. How much state income tax is owed if the state income tax rate is 2.75%?

• $1,594.56

• $1,593.35

• $1,614.85

• none of the above

Thomas Clemens lives in a town that charges a 0.5% city income tax rate. How much city income tax did he owe last year if he had federal taxable income of $45,883?

• $229.42

• $225.78

• $249.89

• none of the above

Clarence earns $164.75 a week at a part time job. Of this amount, his employer deducts $28.71 for federal and state withholding taxes, $1.24 for local withholding tax, and 7.65% for social security & Medicare taxes. What are Clarence's total deductions each week?

• $42.55

• $45.67

• $32.55

• none of the above

Clarence earns $164.75 a week at a part time job. Of this amount, his employer deducts $28.71 for federal and state withholding taxes, $1.24 for local withholding tax, and 7.65% for social security & Medicare taxes. What is Clarence's weekly net pay?

• $100.00

• $122.20

• $142.29

• none of the above