Tax flashcards

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What is taxable income It is the total income less deductions and exemptions
what is progressive tax It is the tax rates are higher the greater one's income.
An income tax is progressive if If the percentage of income paid as taxes increases as income increases.
what is a marginal tax rate Marginal tax rate change in taxes / change in taxable income
If you would have to pay $5000 in taxes on a $25,000 taxable income and $7000 on a $30,000 taxable income, then the marginal tax rate on the additional $5000 of income is 40 percent and the average tax rate is about 23 percent at the $30,000 income level.
Assume that in year 1 you pay an average tax rate of 20 percent on a taxable income of $20,000. In year 2,you pay an average tax rate of 25 percent on a taxable income of $30,000. Assuming no change in tax rates,the marginal tax rate on your additional $10,000 of income is 35%
What is the average tax rate It is the ratio of total taxes paid to total taxable income

What is taxable income

what is progressive tax

An income tax is progressive if

what is a marginal tax rate

If you would have to pay $5000 in taxes on a $25,000 taxable income and $7000 on a $30,000 taxable income, then the marginal tax rate on the additional $5000 of income is

Assume that in year 1 you pay an average tax rate of 20 percent on a taxable income of $20,000. In year 2,you pay an average tax rate of 25 percent on a taxable income of $30,000. Assuming no change in tax rates,the marginal tax rate on your additional $10,000 of income is

What is the average tax rate

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