SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN: 9780357391266
Author: Nellen
Publisher: Cengage
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Which statement is NOT true about the structure of the Earned Income Tax Credit (EITC)?
A. EITC payments decrease as earnings increase, but everyone qualifies for some amount.
B. At a particular range of income, government reduces EITC payments based on a certain fixed percent of income earned.
C. EITC pays a fixed amount at a range of income.
D. Up to a threshold, EITC pays a certain fixed percent of wage earned.
Hi can you help me come up with answers.
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Among the essential characteristics of tax, which do you think is the most relevant for you as a student?
Evaluate the three strategies reducing income, increasing deductions, and taking advantage of tax credits that you listed based on their overall effect on a person's tax situation (the amount of income taxes that the person will have to pay). Evaluate the ethical issues related to the payment of income taxes. in other words, if there is a legal tax-saving strategy available to a person who earns $50,000 per year, will it be ethical for the person to utilize this strategy in order to pay less tax? State how your answer to the previous question would change if the person were making $1,500,000.
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- Which of the following statements is NOT true? A) A progressive tax system should increase the incentive for people to take low paid jobs. B) With a progressive tax system, the more a person earns, the higher the average rate of tax will be. C) A progressive tax is a type of tax that is assessed regardless of income. D) A progressive tax takes a higher percentage of tax from people with higher incomes.arrow_forwardWhich of the following is not considered a purpose of taxation? A. To regulate B. To make the poor poorer C. To minimize the adverse effects of certain activities D. To have an equitable distribution of wealth among inhabitants True or False: You are employed. The Income tax on your salary is required to be paid at the Mayor’s Office.arrow_forwardYou are employed. Your salary is your only source of income. You are subject to which of the following taxes? A. Income Tax B. Business Tax C. A and B D. None of thesearrow_forward
- Which of the following is not a goal of the tax law? a.Economic goals such as reduction in unemployment. b.Raise adequate revenue to operate the government. c.Social goals such as lowering the cost of adoption. d.Ensuring that all persons pay the same amount of tax.arrow_forwardWhich of the following is not a social objective of the tax laws? a) Place more after tax income into the hands of taxpayers for their disposal. b) Fight unemployment problems of certain disadvantaged groups of citizens through the Work Opportunity Tax Credit. C) Relieve the tax burdens of taxpayers who are 65 or over or are blind. d) Subsidize the cost of a home, and thus encourage home ownership. e) Encourage individuals to provide for their future needs by contributing to their retirement savings accounts.arrow_forwardJackie, during one of your talks, shared that she is so frustrated with taxpayers who are trying to get away with their taxes reasoning that the government is in need of funds to finance its pandemic response. You then explained, given that you are about to finish your Income Taxation course, that it is not always the case that the government collection is affected by tax escapes employed by taxpayers. Which of the following should you not include as an example to explain your case? A. tax dodging B. tax transformation C. tax shifting D. tax capitalizationarrow_forward
- tion Which of the following are "pay as you go taxes? (multiple answers with incorrect answers cancelling correct answers, so be careful) Da Medicaid taxes O b. Medicare taxes Oc social security taxes Od. withholding taxes (federal and state) □e. worker compensation premiums Of life insurance premiums Og federal unemployment taxes Oh state unemployment taxesarrow_forwardQuestion 31 of 50. Review the following scenario, then choose the appropriate response describing steps a paid tax preparer must take to demonstrate due diligence. Charlie (21) comes in to your office to have his tax return prepared. He states that he is a full-tim college student with income from a part-time job, and his parents will not claim him as a dependent. He wants to claim the American Opportunity Tax Credit (AOTC). Which of the following describes an appropriate question to ask or action to take ooo Ask him if he has ever been convicted of a misdemeanor offense or had his driver's license revoked. Inform him that he may be assessed a penalty of $545 if he fails to provide all the information required. Inform him he must provide copies of all transcripts before you can prepare his retum. Request a copy of his Form 1098-T, Tuition Statement, and inquire into when and how his education and other were paid. Mark for follow up Question 32 of 50. Tee of these pro ambing systems.…arrow_forwardThis Worksheet is provided as a courtesy to aid your work. Use it at your own discretion. Use the worksheets below to 1) calculate the tax that each person pays, and 2) the total tax revenue that will be collected. Use the following formula to calculate each person’s tax liability: Person X → ($Income in this braquet x 0.15) + ($Income in this braquet x 0.30) = Tax Paid by Person X Example 1; if person X earns $70,000/year, then → ($50,000 x 0.15) + ($20,000 x 0.30) = $7,500 + $6,000 = $13,500 Example 2; if person X earns $10,000/year, then → ($10,000 x 0.15) + ($0 x 0.30) = $1,500 + $0 = $1,500 3. What percent of the Nation's Income does the Total Tax Revenue represent?arrow_forward
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