ACCT 307- Ch 1. Online QUIZ – Flashcards
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Both economic and social considerations can be used to justify:
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Various tax credits, deductions, and exclusions that are designed to encourage taxpayers to obtain additional education.
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Which, if any, of the following statements best describes the history of the Federal income tax?
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The Federal income tax on corporations was held by the U.S. Supreme Court to be allowable under the U.S. Constitution.
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What does not describe the history of the Federal income tax?
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-It did not exist during the Civil War. -Both the Federal income tax on individuals and on corporations was held by the U.S. Supreme Court to be contrary to the U.S. Constitution. -The Federal income tax on individuals was held by the U.S. Supreme Court to be allowable under the U.S. Constitution.
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Which, if any, of the following taxes are proportional (rather than progressive)?
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State general sales tax.
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Burt and Lisa are married and live in a common law state. Burt wants to make gifts to their four children in 2014. What is the maximum amount of the annual exclusion they will be allowed for these gifts?
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$112,000
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A characteristic of FUTA is that:
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Compliance requires following guidelines issued by both state and Federal regulatory authorities. -FUTA is imposed only on the employer ("It is imposed on both employer and employee" and "It is imposed solely on the employee"). "It is applicable to spouses of employees but not to any children under age 18" refers to FICA. Because the administration of FUTA is shared by Federal and state governments, employers must comply with the rules issued by each ("Compliance requires following guidelines issued by both state and Federal regulatory authorities").
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Taxes not imposed by the Federal government include:
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Tax on rent cars. -The Federal government imposes an excise tax on tobacco ("Tobacco excise tax"), customs duties ("Customs duties (tariffs on imports)"), and a gas guzzler tax ("Gas guzzler tax"). It does not impose a tax on rent cars ("Tax on rent cars").
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A characteristic of FICA is that:
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None of these choices are correct. -FICA is imposed on both the employer and the employee ("It is imposed only on the employer"). Spouses who work for each other are not exempt from the tax ("It does not apply when one spouse works for the other spouse"). Its objective is retirement income, not loss of employment ("It provides a modest source of income in the event of loss of employment"). It is administered only by the Federal government ("It is administered by both state and Federal governments").
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In terms of probability, which of the following taxpayers would be least likely to be audited by the IRS?
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Taxpayer is an employed electrician. -Employees are subject to income tax withholding and have little opportunity to avoid reporting income ("Taxpayer is an employed electrician"). Casino gambling income is subject to Form 1099 reporting ("Taxpayer just won a $1 million slot machine jackpot at a Las Vegas casino").
