Personal Finance Courses: Taxes

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1.
What type of tax increases as your income increases?
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Progressive tax. Income tax is an example of a progressive tax.
2.
Which type of account helps you pay for medical expenses while also saving you money on taxes?
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Flexible spending account. A flexible spending account lets you set aside money from your pay, thus reducing the amount of income you will be taxed on.
3.
What is the name of the United States' tax collection agency?
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The Internal Revenue Service. The Internal Revenue Service is the agency that collects taxes for the United States.
4.
The difference between a tax deduction and a tax credit is that _______.
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A tax deduction reduces your taxable income, and a tax credit reduces your actual tax. When you do the math, you will find that tax credits get you more money back than tax deductions do.
5.
Everyone will have to pay Social Security tax on all their income, no matter how much it is.
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False. The amount of earnings one must pay tax on is capped, though it usually changes every year.