Questions and Answers
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 ______.
tax rate
What are social security and medicare?
payroll taxes
Most state and local income taxes are either [blank].
Signup and view all the answers
What is the purpose of the 1040 form?
Signup and view all the answers
How is sales tax calculated?
Signup and view all the answers
What explains the difference between income and taxable income?
Signup and view all the answers
Why does the document ask about dependents?
Signup and view all the answers
What is the purpose of a W-4 form?
Signup and view all the answers
What type of tax funds city programs?
Signup and view all the answers
If a new shirt costs $34.99 and the sales tax is $2.10, what is the sales tax rate?
Signup and view all the answers
What does the chart show about federal and state taxes?
Signup and view all the answers
What is a federal payroll tax that supports retired workers?
Signup and view all the answers
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.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
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.
