Chapter 10/L3 Quiz

What is Income Tax?

• A tax paid only by business owners

• A tax paid by the government

• A tax paid out by anyone who earns an income

What is a Tax Bracket?

• A type of tax return

• The income ranges in which tax rates apply

• A form used for filing taxes

What is Tax Liability?

• The total tax a person or business has to pay

• The amount of money a person earns

• The total number of taxpayers in a country

What is a Tax Return?

• A refund from the government

• A document to request an extension for filing taxes

• A report that a taxpayer has to submit annually to the government and is used to determine a person's tax liability

How are income taxes handled for employees?

• Taxes are taken out of every paycheck.

• Employees must pay taxes once a year.

• Employees receive tax refunds at the end of the year.

What is the responsibility of contractors or self-employed individuals regarding taxes?

• Taxes are automatically deducted from their pay.

• They must set aside money from each payday for taxes.

• They are exempt from paying taxes.

What determines the amount of tax withheld from an employee's paycheck?

• Form W-2

• Form W-4

• Form 1040

How does income level affect tax payment?

• Higher income results in lower taxes.

• Higher income results in higher taxes.

• Income level does not affect tax payment.

What is the consequence of not filing a federal tax return?

• A failure-to-file penalty

• A tax refund

• A bonus from the IRS

When is the deadline for employers to provide Form W-2 to employees?

• April 15th

• January 31st

• March 1st