Income tax

Which states do not have income tax?

• Texas, Washington, and Florida

• California, New York, and Virginia

• Ohio, Michigan, and Indiana

• All states have income tax

Answer explanation

Texas, Washington, and Florida are the states that do not have income tax, making them the correct choice.

What is Income Tax?

• The process of calculating one's earnings

• The money a person pays for professional services

• The money given back to the government by someone who earns a paycheck

• A financial statement provided by employers

Answer explanation

Income Tax refers to the money given back to the government by someone who earns a paycheck, not the process of calculating earnings or paying for services.

Why are working people required to give part of their paycheck back to the government?

• To fund private corporations

• To pay for programs and services like police safety, fire departments, parks, roads, libraries, and more

• To support international travel

• To increase government officials' salaries

Answer explanation

Working people are required to give part of their paycheck back to the government to pay for programs and services like police safety, fire departments, parks, roads, libraries, and more.

What is income tax subtracted from?

• The cost of your purchase

• The money you earned from your job

• Services you think are free

• Sales tax

Answer explanation

Income tax is subtracted from the money you earned from your job, not the cost of your purchase, services you think are free, or sales tax.

What is added to the cost of your purchase?

• Income tax

• Sales tax

• Money from your job

• Services

Answer explanation

Sales tax is added to the cost of your purchase as a percentage of the total price, which goes to the government.

What do sales tax and income tax go to pay for?

• Your job

• The cost of your purchase

• Services you think are free

• The money you earned

Answer explanation

Sales tax and income tax go to pay for services you think are free, such as public education, infrastructure, healthcare, and public safety.

What does "gross pay" refer to?

• The amount you have earned after income tax is subtracted.

• The amount you have earned before income tax is subtracted.

• The amount you have earned after all deductions.

• The amount you have earned including bonuses only.

Answer explanation

Gross pay refers to the amount you have earned before income tax is subtracted, making it the correct choice.

What does the term "gross" mean in the context of gross pay?

• Weird or yucky

• Net amount

• Whole amount

• Partial amount

Answer explanation

The term 'gross' in the context of gross pay refers to the whole amount before any deductions or taxes are taken out.

What is net pay?

• The total amount of money earned before any deductions

• The amount of money you actually get after income tax is subtracted

• The amount of money you owe in taxes

• The total amount of money including bonuses and overtime

Answer explanation

Net pay is the amount of money you actually get after income tax is subtracted.

What is another term commonly used for net pay?

• Gross pay

• Take-home pay

• Salary

• Wages

Answer explanation

Another term commonly used for net pay is take-home pay, which refers to the amount an employee receives after deductions such as taxes and benefits have been taken out.