Income Tax Basics Quiz

Progressive tax rates refer to tax rates that increase as taxable income increases. An example of progressive tax rates is where the first $10,000 of income is taxed at 0%, the next $10,000 taxed at 1%, and so on.

Corporate tax is commonly levied at a flat rate, while individual income tax is often taxed at progressive rates, where the tax rate applied to each additional unit of income increases.

Income tax credits are allowed to reduce tax liability by directly reducing the amount of tax owed, as opposed to deductions which reduce the amount of income subject to tax.

<p>Income from investments may be taxed at different (generally lower) rates than other types of income, as a way to encourage investment and savings.</p> Signup and view all the answers

<p>The taxable income of taxpayers resident in a jurisdiction is generally total income less income producing expenses and other deductions. Generally, only net gain from the sale of property, including goods held for sale, is included in income.</p> Signup and view all the answers