Income Tax Knowledge Quiz

Income tax is a tax imposed on individuals or entities in respect of the income or profits earned by them, commonly referred to as taxable income. It is generally computed as the product of a tax rate times the taxable income.

The tax imposed on companies is usually known as corporate tax and is commonly levied at a flat rate.

Taxation rates may vary by type or characteristics of the taxpayer and the type of income. The tax rate may increase as taxable income increases, known as graduated or progressive tax rates.

<p>Individual income is often taxed at progressive rates where the tax rate applied to each additional unit of income increases. For example, the first $10,000 of income may be taxed at 0%, the next $10,000 at 1%, and so on.</p> Signup and view all the answers

<p>Most jurisdictions exempt local charitable organizations from tax.</p> Signup and view all the answers