Chapter 3

Question 1

Internal Revenue Service (IRS)

Answer 1

responsible for administration and enforcement of federal tax laws

Question 2

Marginal Tax Rate

Answer 2

Tax rate paid on the next dollar of taxable income (slope of linear tax function)

Question 3

Average Tax Rate

Answer 3

Rate at which each dollar is taxed on average
Divide tax liability (total taxes paid) by taxable income

Question 4

Progressive Tax Income

Answer 4

The larger the taxable income, the higher the marginal tax rate

Question 5

Taxes income

Answer 5

the amount of income subject to taxes

Question 6

W-2

Answer 6

There is one of me for every job you work

Question 7

1099

Answer 7

You get me if you are not an employee, but were paid by a company
gains and losses in brokerage accounts, dividend and interest payments, and more
You probably didn’t get taxes withheld if you got me, so you may have a big tax bill coming up

Question 8

W-4

Answer 8

I am received whenever you start a job
yourself and your family on me

Question 9

I-9

Answer 9

I am received whenever you start a job
forms of identification when submitting me

Question 10

Gross Income

Answer 10

total before taxes and deductions