1. What is a progressive tax system? How does it differ from a regressive tax system?
A progressive tax system makes the richer people pay more taxes than the people with less money, but in a regressive tax system, everyone pays the same amount no matter what their income rate is.
2. What is gross income? What types of income are included in gross income?
Gross income is what you get when you combine all your sources of income together. When calculating your gross income, things you should include are: any jobs you have (one or multiple), investment income, alimony, and an unemployment composition.
3. What is the alternative minimum tax?
The alternative minimum tax only applies to some people, but it basically makes sure that the people who …show more content…
The second way is through estimated payments, which is mainly used by self-employed people, or people who have investments. In this way, the person has to estimate their taxes based on their estimated income.
Critical Thinking Questions
1. What are some strategies that you can use to prepare to file taxes each year? What would be the benefits of these strategies?
When you’re preparing to file your taxes for the year, there are three strategies you can use. One way you could do it, is by doing your taxes yourself, this is beneficial because you can save money by not paying a professional to do them for you. If you need some guidance, you could download or buy a tax software to guide you through the process, this costs money, but it is less expensive than hiring someone to do them for you. Lastly, you could hire someone to do them for you this is very beneficial, because these people use more up-to-date tax laws.
2. What are the benefits of taxes for societies and individuals?
Taxes benefit us and our society in many ways, taxes fund all public services, social services, unemployment benefits, public schools, maintain public buildings and parks, build roads, and provide public water and …show more content…
For example, you could see where you ate dinners out a lot when it would have been cheaper to stock up on groceries and make dinners at home for less money. Another example would be if you’re buying unnecessary goods, little things like gum, or candy that you could do without.
4. What are three types of taxes that you pay (or are likely to pay in the future)? Describe these types of taxes.
One type of tax that I am likely to pay in the future is an income tax which is a tax on the amount of money you make in a year. Another type of tax I will probably have to pay will be state sales tax, which is a special tax placed on every item in certain states. Lastly, of course I will (and already do) have to pay sales tax, which is a tax that is placed on every item sold.
5. Find a tax return form and practice filling it out, using either your own information or that of a hypothetical person. What are some of the challenges in filling out a tax return? You can find some forms online at……
I chose tax return form 1040, because in the reading it said it was the basic form that most people used and it was fairly simple. Most of the form was pretty straightforward and was pretty easy, until you get to all the money, gross income, and the harder
A progressive tax system makes the richer people pay more taxes than the people with less money, but in a regressive tax system, everyone pays the same amount no matter what their income rate is.
2. What is gross income? What types of income are included in gross income?
Gross income is what you get when you combine all your sources of income together. When calculating your gross income, things you should include are: any jobs you have (one or multiple), investment income, alimony, and an unemployment composition.
3. What is the alternative minimum tax?
The alternative minimum tax only applies to some people, but it basically makes sure that the people who …show more content…
The second way is through estimated payments, which is mainly used by self-employed people, or people who have investments. In this way, the person has to estimate their taxes based on their estimated income.
Critical Thinking Questions
1. What are some strategies that you can use to prepare to file taxes each year? What would be the benefits of these strategies?
When you’re preparing to file your taxes for the year, there are three strategies you can use. One way you could do it, is by doing your taxes yourself, this is beneficial because you can save money by not paying a professional to do them for you. If you need some guidance, you could download or buy a tax software to guide you through the process, this costs money, but it is less expensive than hiring someone to do them for you. Lastly, you could hire someone to do them for you this is very beneficial, because these people use more up-to-date tax laws.
2. What are the benefits of taxes for societies and individuals?
Taxes benefit us and our society in many ways, taxes fund all public services, social services, unemployment benefits, public schools, maintain public buildings and parks, build roads, and provide public water and …show more content…
For example, you could see where you ate dinners out a lot when it would have been cheaper to stock up on groceries and make dinners at home for less money. Another example would be if you’re buying unnecessary goods, little things like gum, or candy that you could do without.
4. What are three types of taxes that you pay (or are likely to pay in the future)? Describe these types of taxes.
One type of tax that I am likely to pay in the future is an income tax which is a tax on the amount of money you make in a year. Another type of tax I will probably have to pay will be state sales tax, which is a special tax placed on every item in certain states. Lastly, of course I will (and already do) have to pay sales tax, which is a tax that is placed on every item sold.
5. Find a tax return form and practice filling it out, using either your own information or that of a hypothetical person. What are some of the challenges in filling out a tax return? You can find some forms online at……
I chose tax return form 1040, because in the reading it said it was the basic form that most people used and it was fairly simple. Most of the form was pretty straightforward and was pretty easy, until you get to all the money, gross income, and the harder