Income Tax Basics

Name:

Class:

Date:

Show your work for each problem.

1.
What is income tax?
1. a)A tax on money you earn
2. b)A tax on items you buy
3. c)A fee for using roads
4. d)A payment for healthcare only
2.
If you earn 20000 dollars and the flat tax rate is 10%, how much tax do you owe?
3.
In a progressive tax system, what happens when you move to a higher tax bracket?
1. a)You pay less tax overall
2. b)Only your additional income above the threshold is taxed at the higher rate
3. c)The previous bracket no longer applies
4. d)All your income is taxed at the higher rate
4.
You earn 50000 dollars and pay 7500 dollars in taxes. What is your effective tax rate as a percentage?
5.
Calculate the tax on 25000 dollars with a flat 20% tax rate. Then find the take-home pay.
6.
A tax system has two brackets: 10% on income 0-30000 dollars, and 25% above 30000 dollars. Someone earns 30001 dollars. How much MORE tax do they pay compared to someone earning 30000 dollars?
1. a)1 dollar
2. b)0.25 dollars (25 cents)
3. c)25 dollars
4. d)7500 dollars
7.
A country has two tax brackets: 15% on the first 25000 dollars, and 30% on income above 25000 dollars. How much tax does someone earning 40000 dollars owe?
8.
Calculate the total tax for 45000 dollars using these brackets: 10% on 0-15000, 20% on 15001-35000, and 30% above 35000.
9.
Someone pays 6000 dollars in taxes on 40000 dollars of income. What is their effective tax rate?
1. a)25%
2. b)20%
3. c)15%
4. d)30%
10.
Your gross income is 60000 dollars and your standard deduction is 12000 dollars. What is your taxable income?
11.
Maria earns 55000 dollars. The tax brackets are: 12% on 0-20000, and 22% on 20001-55000. Calculate her total tax and effective rate.
12.
John's marginal tax rate is 32% and his effective rate is 22%. Which statement is TRUE?
1. a)All his income is taxed at 32%
2. b)His take-home pay is 68% of his income
3. c)He is in the lowest tax bracket
4. d)His average tax rate on all income is 22%
13.
Tax brackets: 10% on 0-10000, 20% on 10001-40000, 35% above 40000. What is the total tax on 70000 dollars?
14.
Lisa gets a raise from 50000 to 60000 dollars. Brackets: 15% on 0-30000, 25% on 30001-50000, 35% above 50000. How much more take-home pay does she get?
15.
Calculate the effective tax rate for 80000 dollars with brackets: 12% on 0-15000, 22% on 15001-50000, 32% above 50000. Round to one decimal.
16.
What is 'taxable income'?
1. a)The amount of tax you owe
2. b)Income after subtracting deductions
3. c)Income from your job only
4. d)Total income before any adjustments
17.
A freelancer earns 90000 dollars. After a 15000 dollar deduction, what is their take-home pay with brackets: 10% on 0-20000, 22% on 20001-50000, 32% above 50000?