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Questions and Answers
What best describes the purpose of this document?
What best describes the purpose of this document?
It shows how much a person earned, and how much was withheld in taxes.
Sales tax is calculated by multiplying the price of an item by the ______.
Sales tax is calculated by multiplying the price of an item by the ______.
tax rate
What are social security and medicare?
What are social security and medicare?
payroll taxes
Most state and local income taxes are either [blank].
Most state and local income taxes are either [blank].
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What is the purpose of the 1040 form?
What is the purpose of the 1040 form?
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How is sales tax calculated?
How is sales tax calculated?
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What explains the difference between income and taxable income?
What explains the difference between income and taxable income?
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Why does the document ask about dependents?
Why does the document ask about dependents?
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What is the purpose of a W-4 form?
What is the purpose of a W-4 form?
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What type of tax funds city programs?
What type of tax funds city programs?
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If a new shirt costs $34.99 and the sales tax is $2.10, what is the sales tax rate?
If a new shirt costs $34.99 and the sales tax is $2.10, what is the sales tax rate?
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What does the chart show about federal and state taxes?
What does the chart show about federal and state taxes?
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What is a federal payroll tax that supports retired workers?
What is a federal payroll tax that supports retired workers?
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Study Notes
Purpose of Tax Documents
- Tax documents show individual earnings and tax withheld.
- Federal income tax is reported using the 1040 form.
Sales Tax Calculations
- Sales tax is calculated by multiplying the item's price by the tax rate.
- Specifically calculated using a percentage of the price.
Types of Taxes
- Sales, local income, social security, and Medicare are forms of taxation.
- Most state and local income taxes can be either progressive or flat.
Income vs. Taxable Income
- Income refers to total earnings; taxable income accounts for deductions relevant to expenses.
Dependents and Deductions
- Reporting dependents on tax forms can reduce overall tax liability.
W-4 Form Purpose
- The W-4 form determines how much tax is withheld from each paycheck.
Local Taxes and Funding
- Local income taxes finance city programs and services.
Example of Sales Tax Rate
- For a shirt costing $34.99 with a sales tax of $2.10, the sales tax rate is 6 percent.
Payroll Taxes
- Federal taxes, including social security and Medicare, are withheld from employee paychecks.
- The social security tax supports retired workers financially.
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Description
Explore key concepts related to taxes with these informative flashcards. Each card provides essential definitions and explanations about various tax types and their purposes. Perfect for students or anyone looking to understand the fundamentals of taxation.
