What is Income Tax? Taxes 101: Easy Peasy Finance for Kids and B

What is income tax?

• Tax on the money you gift

• Tax on the money you spend

• Tax on the money you save

• Tax on the money you earn

Do everyone pay the same amount of income tax?

• No, it depends on how much you earn

• Yes, everyone pays the same

• No, everyone chooses how much to pay

• Yes, but only during leap years

What is a standard deduction?

• A fixed amount you pay as tax

• A discount on your total income

• A fixed amount deducted from your income before tax calculation

• A bonus added to your income

Do you pay income tax on allowance?

• Yes, but only if it's above $12,000

• No, unless it's a very large allowance

• No, never

• Yes, always

Is it beneficial to earn less to fall into a lower tax bracket?

• No, because taxes are optional

• Yes, always

• No, because higher tax rates apply only to the higher income portions

• Yes, but only in certain states

How many types of income tax are there?

• Two

• One

• Four

• Three

Which states do not have any income tax?

• California

• Texas

• New York

• Pennsylvania

Does the income tax rate change over time?

• No, it only changes for new citizens

• Yes, but only every decade

• No, it stays the same

• Yes, it changes

What was the highest income tax rate ever by the federal government?

• 75% in 1950

• 94% in 1944

• 85% in 1960

• 65% in 1970

When is income tax withheld from your paycheck?

• When you request it

• Once a year

• Only during tax season

• Every time you get a paycheck