Tax Quiz

Example Questions From the Test

• 3In a progressive income tax system, what does a taxpayer's marginal tax rate generally describe?
  • The rate applied to the next portion of taxable income
  • The average rate applied to every dollar of gross income
  • The percentage of income withheld by an employer
  • The highest rate listed anywhere in the tax system
• 4What is income tax withholding from an employee's pay generally intended to do?
  • Determine the employee's final taxable income for the year
  • Replace the need to calculate an annual tax liability
  • Guarantee that the employee will receive a refund
  • Prepay part of the employee's expected income tax during the year
• 15Which action is most clearly an example of tax evasion rather than lawful tax planning?
  • Knowingly concealing reportable income to reduce tax
  • Claiming a deduction that the applicable rules expressly allow
  • Contributing to a tax-advantaged account within the rules
  • Comparing permitted filing methods before submitting a return