3 Income Tax

1. Federal income taxes are regressive.

• True

• False

2. Consumption taxes are taxes on goods and services.

• True

• False

3. On a local level, taxes pay for services such as education, parks, roads, and police, fire, and health departments.

• True

• False

4. In the United States, all citizens are expected to prepare and file tax returns on their own without being forced to do so by the government.

• True

• False

5. 5. A tax for which the rate stays the same, regardless of income, is called a

 

• a. 

  proportional tax.

• b. 

  consumption tax.

• c. 

  regressive tax.

• d. 

  progressive tax.

6. 6. Which of the following is an example of a flat tax?

    

    

• 6. a. 

     consumption tax

• 6. b. 

     federal income tax

• 6. c. 

     property tax

• 6. d. 

     sales tax

7. Your filing status on your tax return is based on

 

• a. 

  your occupation.

• b. 

  your age.

• c. 

  your income.

• d. 

  your marital status.

8. 8. You must file your tax return by this date every year.

    

    

• 8. a. 

     January 1

• 8. b. 

     April 15

• 8. c. 

     June 1

• 8. d. 

     December 31

9. 9. Your employer must have your w2 in the mail or given to you by

• December 31st

• January 1st

• January 31st

• December 1st

What does the IRS expect you to report as income?

• Only wages from formal employment

• Only physical goods and not virtual goods

• Wages and any other form of earnings including virtual currency gains

• Only large transactions over $10,000