Arthur pays tax of $5,000 on taxable income of $50,000 while taxpayer Barbara pays tax of $12,000...
Question:
Arthur pays tax of $5,000 on taxable income of $50,000 while taxpayer Barbara pays tax of $12,000 on $120,000. The tax is a:
a) progressive tax
b) proportional tax
c) regressive tax
d) none of the above
Income Taxes:
The internal revenue service (IRS) has different taxes for income and investments. Investments are often taxed at capital gain rates whereas income is typically taxed at the income rates.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerAnswer choice: a) proportional tax
Explanation:
A proportional tax charges the same tax percentage on all taxpayers regardless of their income. In...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Income Tax: Tax Liability & Deductions
from
Chapter 3 / Lesson 5
17K
Learn what income tax liability is. Find out what taxable and adjusted gross income are, discover how to calculate tax liability, and examine common deductions.
Related to this Question
- A progressive income tax is one where: A. All taxpayers pay the same rate of tax. B. Tax rates increase when the tax base increases. C. The rate of tax decreases as the tax base increases. D. None of these.
- Which, if any, of the following taxes are proportional (rather than progressive)? A) State general sales tax B) Federal corporate income tax C) Federal estate tax D) Federal individual income tax E) All of these
- What is adjusted gross income (AGI)? a) The taxable income after deductions b) The taxable income before deductions c) The taxpayer's after-tax income d) The amount that is subject to tax.
- The Coolidge family has taxable income of $165,000 in 2012. They live in a state in which income over $100,000 is taxed at 13%. What is their total effective (marginal) tax rate? Assume 28% federal tax rate.
- Mary is 70 years old, widowed, and blind. She must file a 2012 Federal income tax return if her gross income exceeds: a) $12,650 b) $8,750 c) $11,350 d) None of the above
- Patricia has a taxable income of $40,000 on which she pays income tax of $6,671. If Patricia's taxable income increases by $2,000, she will pay an additional tax of $500. What is Patricia's marginal tax rate? a. 15.00% b. 16.86% c. 17.24% d. 25.00% e. N
- The single biggest federal tax is the: a. excise tax. b. federal income tax. c. estate tax. d. corporate income tax.
- Which of the following taxes are likely to be regressive taxes? a. Income taxes based on ability to pay. b. Sales taxes and use taxes. c. Additional sales and use taxes imposed on luxury vehicles. d. None of the above.
- Assume a tax system with a tax of $1,000 on taxable income of $1,500 tax on taxable income of $20,000. Is the tax rate system: a. None of the above. b. Progressive c. Regressive d. Proportional
- Lillian, a single taxpayer, had the following income and deductions for the tax year 2018. Compute Lillian's taxable income and federal tax liability for 2018. | __Income__ | | Salary | $90,000 | Business Income | 24,000 | Interest income from taxable
- George has $65,000 of salary income and Mary has $45,000 of salary income and they file a joint tax return. They have two dependent children and $20,000 of itemized deductions. a) Determine George and Mary's income tax liability for 2011. b) How much tax
- Arthur Wesson, an unmarried individual who is age 68, reports taxable income of $160,000 in 2015. He records positive AMT adjustments of $40,000 and preferences of $35,000. Arthur itemizes his deductions, and his regular tax liability in 2015 is $38,000.
- Dan has AGI of $50,000 and paid the following taxes during this tax year. State income tax withholding $1,300 State income tax estimated payments 740 Federal income tax withholding 3,100 Social Se
- Campbell, a single taxpayer, earns $400,000 in taxable income and $2,000 in interest from an investment in State of New York bonds. a. How much federal tax will she owe? b. What is her average tax rate? c. What is her effective tax rate? d. What is her cu
- Deduction of Taxes. Joyce is a single, cash-method taxpayer. On April 11, 2014, Joyce paid $120 in state income taxes with her 2013 state income tax return. During 2014, Joyce had $1,600 in state inco
- Assume a tax system with a tax of $1,000 on taxable income of $10,000 and a $1,500 tax on taxable income of $20,000. Is the tax rate system: A. Progressive B. Regressive C. Proportional D. None of the above.
- During the current year, Barry (single taxpayer) has taxable income of $60,000. Of that amount, $10,000 is long-term capital gain. How will Barry calculate the tax on his income? a. Use the tax rate schedule to calculate tax on $50,000; multiply the capit
- Which of the following is defined as a tax rate that decreases when the tax base increases? a. Average tax b. Proportional tax c. Marginal tax d. Progressive tax e. Regressive tax
- If the incremental federal income tax rate is 38% and the incremental state income tax rate is 6%, what is the effective combined income tax rate (t)? If state income taxes are 14% of taxable income,
- Barry (age 45) is a single taxpayer. In 2009, he has gross income of $15,000 and itemized deductions of $6,500. If Barry claims one exemption on his 2009 income tax return, calculate the following amounts: a. His personal exemption amount b. Barry's tax
- After computing all tax preferences and AMT adjustments, Adam and his wife Cindy have AMTI of $290,000 if Adam and Cindy file a joint tax return, what exemption amount can they claim for AMT for 2011? a- 0 b- 39,450 c- 46,700 d- 74,450
- After computing all tax preferences and AMT adjustments, Adam and his wife Cindy have AMTI of $290,000. If Adam and Cindy file a joint tax return, what exemption amount can they claim for AMT for 2013? a) $0 b) $46,775 c) $51,900 d) $80,800
- Tax. Ms. Jones is in the 35 percent tax bracket. How much tax will she have to pay in each of the following cases? (a) Dividend income = $10,000 (b) Long-term capital gain = $10,000
- In 2012, Loretta makes a taxable gift of $2 million to her granddaughter, Bertha. Presuming that Loretta used up both her unified transfer tax credit and her generation-skipping transfer tax credit, how much tax does Loretta owe as a result of the transfe
- Harvey and Betty Duran, both age 37, are married with one dependent child. Determine their taxable income from the following information from 2014, and their tax liability. Both the ABC and XYZ partne
- Which statement is correct? A) Tax credits reduce tax liability on a dollar-for-dollar basis. B) Tax deductions reduce tax liability on a dollar-for-dollar basis. C) The benefit of a tax credit depends on the taxpayer's marginal tax rate. D) Tax deduction
- The following taxes are regressive except: A. FICA and self-employment taxes B. federal income tax for individuals C. All of these. D. unemployment taxes
- With a taxable income of $332,000, what it the effective tax rate? What is marginal tax rate?
- Linda is a qualifying tax widow in 2010. In 2010, she reported $75,000 of taxable income (all ordinary). What is her gross tax liability using the tax rate schedules?
- The income tax law established which of the following as a basis for taxation? A) Economic income B) Increase in wealth C) Business income D) Accounting income
- The following taxes were paid by Adam Smith. Real estate taxes on his home: $3,000 State income taxes: $900 Cigarette taxes: $500 State gasoline tax (personal use of automobile): $150 Social Security tax (withheld from wages): $5,500 Penalty on tax
- Fred needs $65,000 after tax in retirement income. If his expected average tax rate will be 21% and his marginal will be 27%, how much does he need before tax? a. $89,041. b. $82,278. c. $78,650. d. None of the above. e. $82,550.
- Mary, a CPA, prepared Gordon's tax return for the current year. In preparing his return, she took a deduction that is contrary to the code. She feels that he is entitled to this deduction because of h
- Lillian, a single taxpayer, had the following income and deductions for the tax year 2018. Compute Lillian's marginal, average and effective tax rates. | __Income__ | | Salary | $90,000 | Business Income | 24,000 | Interest income from taxable bonds
- Jack files a tax return as a single taxpayer. His alternative minimum taxable income is $200,000. What is his AMT exemption amount? a. $20,200 b. $33,400 c. $53,600 d. $80,800
- Lillian, a single taxpayer, had the following income and deductions for the tax year 2018. For tax planning purposes. which of the following three rates is the most important: marginal, average or effective tax rate? | __Income__ | | Salary | $90,000
- Joyce is a single, cash-method taxpayer. On April 11, 2009, Joyce paid $120 with her 2008 state income tax return. During 2009, Joyce had $1,600 in state income taxes withheld. On April 13, 2010, Joyce paid $200 with her 2009 state tax return. During 2010
- Eric is single and has no dependents for 2016. He earn $30,000 and had deductions from gross income of $1,800 and itemized deductions of $6,500. Compute Eric's income tax for the year using the Tax Ra
- Cynthia and John have dependent twins that are 24 years old. Their joint income places them in the 35 percent marginal tax bracket. What are their total tax savings if they can transfer $7,500 of taxable income to each of the children? The children have n
- Cynthia and John have dependent twins ages 18. Their joint income places them in the 33 percent marginal tax bracket. What are their total tax savings if they can transfer $2400 of taxable income to each of the children? The children have no other income
- B, a single taxpayer with no dependents, has income and deductions for 2017 that are summarized as follows: Deductions for A.G.I. 2,175 Itemized deductions 3,200 Non-refundable income tax credit 300 Federal income tax withheld 1,500 Based on these facts,
- Myrna and Geoffrey filed a joint tax return in 2017. Their AGI was $85,000, and itemized deductions were $13,700, which included $4,000 in state income tax. In 2018, they received a $1,800 refund of the state income taxes that they paid in 2017. The stand
- Stephanie has a taxable income of $48,200 and a tax liability of $7,913. If Stephanie's income increases by $4,000, her tax liability will be $8,913. a. What is her average tax rate on the $48,200 of income? b. What is her marginal tax rate?
- Given the following tax structure, Taxpayer Salary Muni-Bond Interest Total Tax Mihwah $10,000 $10,000 $600 Shameika $50,000 $30,000 ? What minimum tax would need to be assessed on Shameika to make the tax progressive with respect to average tax rates?
- What is a progressive tax? Why is the federal estate tax illustrative of a progressive tax?
- Which of the following taxes has a ceiling on the amount of annual earnings subject to tax? a. Sale tax. b. Federal income tax. c. FICA - OASDI taxes. d. FICA Medicare taxes.
- George, a wealthy investor, is uncertain whether he should invest in taxable or tax-exempt bonds. What tax and non-tax factors should he consider?
- Marginal Tax Rate. Jill and George are married and file a joint return. They expect to have $425,000 of taxable income in the next year and are considering whether to purchase a personal residence tha
- Jane files a tax return as a single taxpayer. She had the following items in 2018: Salary of $85,000 Interest income of $3,000 Loss of $75,000 on the sale of Section 1244 acquired 2 years ago What should be Jane's AGI for 2018? a) $88,000 b) $10,000 c) $8
- In 2015, Lisa and Fred, a married couple, have taxable income of $490,000. If they were to file separate tax returns, Lisa would have reported taxable income of $210,000 and Fred would have reported taxable income of $280,000. Use Tax Rate Schedule for re
- In 2013, Loretta made a taxable gift of $2 million to her granddaughter, Bertha. Presuming that Loretta used up both her unified transfer tax credit and her generation-skipping transfer tax credit, how much tax does Loretta owe as a result of the transfer
- Karen Jones files as head of household. Taxable income on line 43 of Form 1040 is 243,666. How much is her 2017 federal tax amount? a. 55,627 b. 58,051 c. 60,101 d. 63,809
- Joyce is a single, cash-method taxpayer. On April 11,2014, Joyce paid $120 in state income taxes with her 2013 state income tax return. During 2014, Joyce had $1,600 in state income taxes withheld. On
- Jason and Mary are married taxpayers in 2016. They are both under age 65 and in good health. For this tax year, they have a total of $41,000 in wages and $700 in interest income. Jason and Mary's deductions for adjusted gross income amount to $5,000 and t
- Raymond Moss gets an annual bonus of 15% of any income before deducting bonus and income taxes, above $100,000 income before bonus and income taxes is $250,000. Income tax rate is 30%. Compute total amount of Raymond's bonus and compute income tax expen
- Tom's gross pay for the month is $3,200. Tom's deduction for federal income tax is based on a rate of 25%. Tom has no voluntary deductions. Tom's yearly pay is under the limit for OASDI. Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%. Wha
- Barry is age 45 and a single taxpayer. In 2016, he has a gross income of $17,000 and itemized deductions of $6,500. If Barry claims one exemption on his 2016 income tax return, what is his personal exemption amount? a. $4,000. b. $3,900. c. $4,050. d. $3,
- Harry and Wilma are married and file a joint income tax return. On their tax return, they report $44,000 of adjusted gross income ($20,000 salary earned by Harry and $94,000 salary earned by Wilma) an
- In 2015, Lisa and Fred, a married couple, have taxable income of 300,000. If they were to file separate tax returns, Lisa would have reported taxable income of 125,000 and Fred would have reported tax
- Campbell, a single taxpayer, earns $205,000 in taxable income and $6,000 in interest from an investment in State of New York bonds. What is the marginal tax rate? (Use the U.S. tax rate schedule.) (D
- Christina's taxable income is $35,000, Charles' is $50,000, and Chris' is $500,000. Each of these taxpayers additionally earned $1,000 of long term capital gain income in 2019. All of the taxpayers file single. Which of the following answers is correct re
- State tax. Federal tax. Incremental tax If a company earns $500,000 in revenue, and has $100,000 in allowable expenses, calculate the: a) State Tax owed if 9% State Tax Rate b) Federal Tax owed: c) The Combined incremental tax rate
- Mickey, a calendar year taxpayer, was not required to file a 2011 Federal income tax return because his AGI was negative due to business losses. During 2012, his AGI is $120,000 and his tax liability is $10,000. To avoid a penalty for tax underpayments f
- Dan has a high 50,000 and paid the following taxes during this tax year: State income tax withholding $1,400 State income tax estimated payments 750 Federal income tax withholding 3,000 Social securi
- Compute the 2015 standard deduction for the following taxpayers. If an amount is zero, enter "0". Ruby and Woody are married and file a joint tax return. Ruby is age 66 and Woody is 69. Their taxable
- Arnold Industries has pretax accounting income of $40 million for the year ended December 31, 2018. The tax rate is 40%. The only difference between accounting income and taxable income relates to a
- Suppose you currently have taxable income of $50,000 per year. You are subject to a marginal income tax rate of 20%, and your current average tax rate is 10%. a. How much do you pay annually in tax
- Joyce is a single, case-method tax paper. On April 11, 2014, Joyce paid $120 state income taxes with her 2013 state income tax return. During 2014, Joyce had $1,600 in state income taxes withheld. On
- Which of the following statements regarding tax credits is true? A) Tax credits reduce taxable income dollar for dollar. B) Tax credits provide a greater tax benefit the greater the taxpayer's marginal tax rate. C) Tax credits reduce taxes payable doll
- Chuck, a single taxpayer, earns $75,000 in taxable income and $10,000 in interest from an investment in City of Heflin bonds. a. Using the U.S. tax rate schedule, how much federal tax will he owe? b. What is his average tax rate? c. What is his effective
- Darrel and Barbara have two children, ages 13 and 10. Their modified AGI is $120,000. What is the amount of their child tax credit?
- Richard and Linda are the only two employees of Bush Company. In January, 2013, Richard's gross pay was $5,500 and Linda's gross pay was $5,200. Each employee pays federal income tax equal to 25% of gross pay. In addition, Linda pays $200 for insurance pr
- Which of the following taxes are likely to be regressive taxes? a) Sales taxes and use taxes. b) Income taxes based on ability to pay. c) Additional sales and use taxes imposed on luxury vehicles. d) None of the above.
- Sara is a single taxpayer with a taxable income of $52,000. If the tax tables had 10% tax on the first $8,000 of taxable income, 15% on income above $8,000 but less than 34,000,and 25% on income over $34,000. What is Sara's average tax rate?
- Lila Harrison's is the sole employee of ABC Grocers. Her gross pay for the week was $400. She had deductions of $50 for federal income tax, $25 for social security tax, and $5.80 for Medicare tax. The journal entry to record her salary would include: A.
- Campbell, a single taxpayer, earns $212,500 in taxable income and $10,500 in interest from an investment in State of New York bonds. How much tax does he owe?
- Martha and Rob, a married couple, under 50 years of age, have adjusted gross income on their 2015 joint income tax return of $45,000, before considering any IRA deduction. Martha and Rob have no earned income. What is the amount of Martha's maximum deduct
- Using the table of Progressive Taxes below, compute the taxable income and taxes for the following taxpayers. Which taxpayer has a. the highest nominal tax rate? b. the highest effective tax rate? c.
- Scott and Cindy Muir had alternative minimum taxable income of $970,000 in the current year and file a joint return. For purposes of computing the alternative minimum tax, their exemption is a) $25,000 b) $55,850 c) $71,700 d) $111,700.
- Olivia, a single taxpayer, has AGI of $280,000, which includes $220,000 of salary and $60,000 of investment income. She will pay Medicare tax on the $60,000 of investment income of: A) $0. B) $2,280. C) $9,000. D) $870.
- The tax rates are as shown. Taxable Income Tax Rate $0 - 50,000 15% 50,001 - 75,000 25% 75,001 - 100,000 34% 100,001 - 335,000 39% What is the average tax rate for a firm with a taxable income of $123,013? a. 27.87% b. 20.00% c. 36.28% d. 25.38% e. 3
- Lacy is a single taxpayer. In 2016, her taxable income is $40,800. What is her tax liability if her $40,800 of taxable income includes $6,000 of qualified dividends?
- Lacy is a single taxpayer. In 2016, her taxable income is $40,800. What is her tax liability if her $40,800 of taxable income includes $2,300 of qualified dividends?
- Adam is paid on a monthly basis. For the month of January of the current year, he earned a total of $8,288. FICA tax for Social Security is 6.2% and the FICA tax for Medicare is 1.45%. The FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemplo
- Terry is a single taxpayer, age 18. Terry has a salary of $1,800, interest of $1,600 and Itemized deductions of $600. Requirements: 1. Assuming Terry is self-supporting, what is Terry's taxable inco
- Jimbo, a single taxpayer, earns $60,000 in taxable income and $5,000 in interest from an investment in city of Boston Bonds. Using the U.S. tax rate schedule for year 2016, how much federal tax will h
- In 2018, George and Martha are married and file a joint tax return claiming their two children, ages 10 and 8 as dependents. Assuming their AGI is $119,650, what is George and Martha's child tax credit?
- Trudy Yost has a federal tax levy of $1,700 against her. If she is single with two personal exemptions, each worth $4,000 each per year, a standard deduction of $6,300 per year, and had a take-home pa
- Lacy is a single taxpayer. In 2016, her taxable income is $40,800. What is her tax liability if all of her income is salary from her employer?
- (a) What is a regressive tax? (b) Why is the social security tax considered a regressive tax?
- Lacy is a single taxpayer, In 2015, her taxable income is $43,200. What is her tax liability in each of the following alternative situations? Use Tax rate schedule for reference. (Do not round interme
- Lacy is a single taxpayer. In 2015, her taxable income is $49,600. What is her tax liability in each of the following alternative situations? Use Tax rate schedule for reference. (Do not round interme
- Lacy is a single taxpayer. In 2016, her taxable income is $49,600. What is her tax liability in each of the following alternative situations? Use the Tax Rate Schedule for reference. (Do not round int
- Lacy is a single taxpayer. In 2015, her taxable income is $44,800. What is her tax liability, in each of the following alternative situations? Use Tax rate schedule for reference. (Do not round interm
- Compute the 2019 tax liability and the marginal and average tax rates for the following taxpayers. a. Chandler, who files as a single taxpayer, has taxable income of $150,400. b. Lazare, who files as a head of household, has taxable income of $54,200.
- Tom and Meg Wherry joint tax return for 2014 shows $46,000 of AGI. During the year tom contributed $3,000 to his IRA and Meg contributed $1,500 her IRA. What amount of tax credit is available for thes
- Red, Green, Blue, and Purple have taxable income as follows: a. Calculate the marginal tax rate and the effective tax rate for each of the C corporations. b. Explain why the marginal tax rate for a C corporation can exceed 35%, but the effective tax rate
- In 2017, Lisa and Fred, a married couple, had taxable income of $462,500. If they were to file separate tax returns, Lisa would have reported taxable income of $215,000 and Fred would have reported ta
- In 2017, Lisa and Fred, a married couple, had taxable income of $490,000. If they were to file separate tax returns, Lisa would have reported taxable income of $210,000 and Fred would have reported ta
- In 2014, Lisa and Fred, a married couple, have taxable income of $445,000. If they were to file separate tax returns, Lisa would have reported taxable income of $225,000 and Fred would have reported taxable income of $220,000. What is the couple's marriag
Explore our homework questions and answers library
Browse
by subject