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Questions and Answers
Which of the following is a key feature of income tax law and practices?
Which of the following is a key feature of income tax law and practices?
- Tax incentives for investing in speculative ventures
- Tax exemptions for high-income earners
- Tax deductions for charitable contributions (correct)
- Tax credits for purchasing luxury items
What is the purpose of tax withholding from an employee's paycheck?
What is the purpose of tax withholding from an employee's paycheck?
- To collect income tax as it is earned (correct)
- To fund social security benefits
- To reduce the employer's administrative burden
- To provide interest-free loans to employees
Which of the following is a tax planning strategy for minimizing tax liability?
Which of the following is a tax planning strategy for minimizing tax liability?
- Concealing income from the tax authorities
- Maximizing contributions to retirement accounts (correct)
- Overstating business expenses
- Delaying filing tax returns indefinitely
