Understanding Personal Taxes

Fill in the blanks: Personal Income Tax is a direct tax ______ on income of a person.

• levied

• exempted

• reduced

• ignored

Fill in the blanks: Personal Income Tax will be withheld by an individual’s ______.

• employer

• bank

• friend

• neighbor

Fill in the blanks: Self-employed individuals do not have taxes ______.

• due

• exempt

• waived

• ignored

Fill in the blanks: Revenues help fund programs and services such as Social Security, ______, schools, roads, national security and welfare system.

• Medicare

• Agriculture

• Tourism

• Entertainment

Fill in the blanks: Personal Income Tax has two types: ______ income and unearned income.

• earned

• passive

• investment

• business

Fill in the blanks: Earned Income results from the ______ labor or service of an individual.

• active

• passive

• indirect

• unearned

Fill in the blanks: Earned Income is subject to taxation includes salary, wages, tips, commissions, ______, unemployment benefits, sick pay.

• bonuses

• dividends

• interest

• capital gains

Fill in the blanks: Unearned Income is not gained by labor, service or ______.

• capital

• effort

• investment

• work

Fill in the blanks: Unearned Income is subject to taxation includes interests, dividends, profit from the sale of assets, rents, royalties, ______ winnings, alimony.

• gambling

• lottery

• investment

• inheritance

What services do local governments deliver using taxes?

• Police and fire protection

• Building schools

• Maintaining local roads

• All of the above