Question 1

The average tax rate is the taxable income divided by the total tax liability.

Accepted Answer

The average tax rate is the total tax liability divided by the taxable income.

Question 2

Legislative regulations do not have the full effect of law.

Accepted Answer

Legislative regulations, once properly enacted or promulgated, have the full force and effect of law, as they are authorized by statutes passed by legislatures and are considered part of the legal framework.

Question 3

Jordan and Paul,a married couple,have taxable income of $45,375 which is taxed as follows:  Their average tax rate is:
A) 10%.
B) 12.5%.
C) 13%.
D) 15%.

Accepted Answer

To calculate the average tax rate, we need to divide the total tax paid by the taxable income. From the tax table, we can see that the couple pays $4,453.75 in federal taxes.

Average tax rate = Total tax paid / Taxable income

= $4,453.75 / $45,375

= 0.098 or 9.8%

However, we need to round this up to the nearest whole number, which gives us an average tax rate of 10%.

Therefore, the correct answer is C) 13%.

Question 4

Which of the following would disqualify a taxpayer from filing a Form 1040EZ?
A) The taxpayer is married.
B) The taxpayer has interest income of $1,400.
C) The taxpayer is age 66.
D) The taxpayer received unemployment compensation income of $1,700.

Accepted Answer

The answer of Which of the following would disqualify a...

Question 5

A tax rate that increases as the tax base increases is an example of what kind of tax rate structure?
A) Progressive.
B) Proportional.
C) Regressive.
D) Recessive.

Accepted Answer

A tax rate that increases as the tax base increases is known as a progressive tax rate structure. This means that the more an individual earns, the greater percentage of their income they will pay in taxes.

Question 6

The amount of tax liability calculated using the tax tables will always be the same as the amount calculated using the tax rate schedules.

Accepted Answer

The tax liability calculated using the tax tables may not always be the same as the amount calculated using the tax rate schedules, as the tax rate schedules take into account a taxpayer's specific income level and deductions.

Question 7

Jordan and Paul,a married couple,have taxable income of $45,375 which is taxed as follows:  Their marginal tax rate is:
A) 10%.
B) 12.5%.
C) 13%.
D) 15%.

Accepted Answer

The answer of Jordan and Paul,a married couple,have taxable income...

Question 8

Which of the following would disqualify a taxpayer from filing a Form 1040EZ?
A) Has total taxable income under $100,000.
B) Has no dependents.
C) Be age 68 and not blind.
D) Has interest income less than $1,500.

Accepted Answer

The requirement for a taxpayer to use Form 1040EZ is that they have taxable income of less than $100,000, no dependents, and are under the age of 65 or are blind. Since option C states that the taxpayer is 68 and not blind, they do not meet the eligibility requirements for using Form 1040EZ. Therefore, option C would disqualify the taxpayer from filing a Form 1040EZ. The other options do not disqualify the taxpayer from using Form 1040EZ.

Question 9

A tax rate that increases as the tax base decreases is an example of what kind of tax rate structure?
A) Progressive.
B) Proportional.
C) Regressive.
D) Recessive.

Accepted Answer

A regressive tax rate structure means that the tax rate decreases as the tax base increases, which is the opposite of what is described in the question. A progressive tax rate structure means that the tax rate increases as the tax base increases, which is also the opposite of what is described in the question. A proportional tax rate structure means that the tax rate remains the same regardless of the tax base, which is also not what is described in the question. Therefore, the best choice is C, regressive, which matches the description of a tax rate that increases as the tax base decreases. "Recessive" is not a term used in tax rate structures.

Question 10

A tax rate structure where the tax rate remains at the same rate regardless of the tax base is:
A) A progressive rate structure.
B) A proportional rate structure.
C) A regressive rate structure.
D) None of these.

Accepted Answer

A proportional rate structure, also known as a flat tax rate, is where everyone pays the same percentage of their taxable income regardless of the amount.

Question 11

Which of the following statements is true with respect to marginal and average tax rates under a progressive tax structure?
A) Marginal rates are always larger than average rates.
B) Marginal rates are always smaller than average rates.
C) Average rates can only be calculated for taxpayers with income over $100,000.
D) Average rates are never more than marginal rates.

Accepted Answer

The answer of Which of the following statements is true...

Question 12

With respect to the income tax formula,which of the following statements is correct?
A) The simplified income tax formula is only applicable to taxpayers with taxable income less than $100,000.
B) Tax liability is determined by applying an appropriate tax rate to total income.
C) Certain deductions from income are permitted before calculating tax liability.
D) Tax payments are ignored when calculating the tax refund or tax due with the return.

Accepted Answer

Certain deductions from income, such as the standard deduction or itemized deductions, are allowed to be subtracted from gross income to arrive at taxable income, which is then used to calculate tax liability.

Question 13

A tax rate that remains the same as the tax base increases is an example of what kind of tax rate structure?
A) Progressive.
B) Proportional.
C) Regressive.
D) Recessive.

Accepted Answer

A proportional tax rate structure means that the tax rate remains the same regardless of the tax base. Therefore, as the tax base increases, the tax amount increases proportionally, without any changes in the tax rate. This is also known as a flat tax rate.

Question 14

Which statement is correct with respect to marginal and average tax rates under a progressive tax structure?
A) At very high levels of taxable income,a taxpayer's marginal and average tax rates will be the same.
B) At very low levels of taxable income,a taxpayer's marginal and average tax rates will be the same.
C) For most taxpayers,the average tax rate is larger than the marginal tax rate.
D) Generalizations cannot be made.The question can only be answered with reference to the tax situation of a specific taxpayer.

Accepted Answer

At very low levels of taxable income, a taxpayer's marginal and average tax rates will be the same. This is because the tax brackets start at a lower rate and increase progressively as income increases. Therefore, at the lowest tax bracket, the marginal tax rate and the average tax rate will be the same. At higher levels of income, the marginal tax rate will be higher than the average tax rate. Therefore, statement A and C are incorrect. Statement D is partially correct, but statement B is a more accurate generalization.

Question 15

Joe is an employee of Adams Company.Joe properly completed his Form 1040EZ tax return and was required to pay the IRS $1,372 at the time of filing.Joe's tax liability for the year is $1,372.

Accepted Answer

The answer of Joe is an employee of Adams Company.Joe...

Question 16

The federal income tax is an example of a:
A) Progressive rate structure.
B) Proportional rate structure.
C) Regressive rate structure.
D) Flat tax structure.

Accepted Answer

The federal income tax has a progressive rate structure, which means that as a person's income increases, they are subject to higher tax rates.

Question 17

Which of the following would disqualify a taxpayer from filing a Form 1040EZ?
A) The taxpayer has total income of $74,000.
B) The taxpayer has interest income of $500.
C) The taxpayer is age 63.
D) The taxpayer has one dependent.

Accepted Answer

The answer of Which of the following would disqualify a...

Question 18

Which of the following is an example of a regressive tax?
A) Federal income tax.
B) State and local taxes levied on property.
C) Sales tax.
D) Social security tax.

Accepted Answer

The answer of Which of the following is an example...

Question 19

Jake earned $15,000 and paid $1,500 of income tax,while Jill earned $40,000 and paid $3,000 of income tax.The structure of the tax their income is subject to is:
A) Progressive.
B) Proportional.
C) Regressive.
D) Flat.

Accepted Answer

The answer of Jake earned $15,000 and paid $1,500 of...

Question 20

The tax rate is applied against the tax base to determine the amount of tax liability.

Accepted Answer

This statement is true. The tax rate is a percentage that is applied against the tax base, which is the amount of income or property value that is subject to taxation. Multiplying the tax rate by the tax base gives the amount of tax liability that the taxpayer owes to the government.

Quiz 1: Introduction to Taxation, the Income Tax Formula, and Form 1040ez

The average tax rate is the taxable income divided by the total tax liability.

Legislative regulations do not have the full effect of law.

Jordan and Paul,a married couple,have taxable income of $45,375 which is taxed as follows: Their average tax rate is:

Which of the following would disqualify a taxpayer from filing a Form 1040EZ?

A tax rate that increases as the tax base increases is an example of what kind of tax rate structure?

The amount of tax liability calculated using the tax tables will always be the same as the amount calculated using the tax rate schedules.

Jordan and Paul,a married couple,have taxable income of $45,375 which is taxed as follows: Their marginal tax rate is:

Which of the following would disqualify a taxpayer from filing a Form 1040EZ?

A tax rate that increases as the tax base decreases is an example of what kind of tax rate structure?

A tax rate structure where the tax rate remains at the same rate regardless of the tax base is:

Which of the following statements is true with respect to marginal and average tax rates under a progressive tax structure?

With respect to the income tax formula,which of the following statements is correct?

A tax rate that remains the same as the tax base increases is an example of what kind of tax rate structure?

Which statement is correct with respect to marginal and average tax rates under a progressive tax structure?

Joe is an employee of Adams Company.Joe properly completed his Form 1040EZ tax return and was required to pay the IRS $1,372 at the time of filing.Joe's tax liability for the year is $1,372.

The federal income tax is an example of a:

Which of the following would disqualify a taxpayer from filing a Form 1040EZ?

Which of the following is an example of a regressive tax?

Jake earned $15,000 and paid $1,500 of income tax,while Jill earned $40,000 and paid $3,000 of income tax.The structure of the tax their income is subject to is:

The tax rate is applied against the tax base to determine the amount of tax liability.