Leonardo earns $80,000 of taxable income. He also has $15,000 in city of Tulsa bonds. His wife, Theresa, earns $50,000 of taxable income. Eliminating the current system of withholding income taxes directly from employee paychecks would:
A) Violate the convenience criterion of federal taxation
B) Increase the rate of compliance
C) Make collection of federal income taxes easier
D) All of these
E) None of these

Question

Quizplus · Accepted Answer

Eliminating the current system of withholding income taxes directly from employee paychecks would violate the convenience criterion of federal taxation, as it would require taxpayers to make large lump-sum payments instead of spreading out their tax liability throughout the year. While eliminating withholding may increase compliance by reducing errors, it would likely make collection of federal income taxes more difficult and time-consuming. Therefore, only choice A is the best answer.

Leonardo Earns $80,000 of Taxable Income