AFLA Review for tax test Name Explain the basic process of calculating income taxes, as 2. What is meant by filing status? How does it affect tax shown in Figure 4.9. What is the difference ference between gross calculations? income, adjusted gross income, and taxable income? gross Income adjusted gro Income tax computation total tax or tables MINUS djustments to MINUS Income deductions an MINUS MINUS exemptions tax credit withholding TODALS Ijusted grow EQUALS taxable income QUALS EQUALS total tax FIGURE 4.9 Flow chart showing the basic steps in calculating income tax 3. What are deductions? How should you choose 4. What is meant by a progressive income tax? Explain the use between taking the standard deduction and of marginal tax rates in calculating taxes. What is meant by a itemizing deductions? tax bracket? What is the difference between a tax deduction and a tax 1 7. What are FICA taxes? What type of income is subject to credit? Why is a tax credit more valuable? FICA taxes? 7-8, state whether the statement is True or False. Explain why. We're both single with no children and we both have the 8. My husband and I paid $5,000 in mortgage interest this year, but we did not get a tax benefit from it because we took the same total (gross) income, so we must both pay the same standard deduction. amount in taxes.MFLA Review for tax test Name 1. Explain the basic process of calculating income taxes, as 2. What is meant by filing status? How does it affect tax shown in Figure 4.9. What is the difference between gross calculations? income, adjusted gross income, and taxable income? djusted gros tax computation gross Income total tax income or tables deductions and MINUS MINGS justments to income exemptions tax credits withholding EQUALS asted gros QUALS mount owed axable income total tax (or refund) FIGURE 4.9 Flow chart showing the basic steps in calculating income tax. 3. What are deductions? How should you choose 4. What is meant by a progressive income tax? Explain the use between taking the standard deduction and of marginal tax rates in calculating taxes. What is meant by a itemizing deductions? tax bracket? 5. What is the difference between a tax deduction and a tax ( 7. What are FICA taxes? What type of income is subject to credit? Why is a tax credit more valuable? FICA taxes? n 7-8, state whether the statement is True or False. Explain why. 7. We're both single with no children and we both have the 8. My husband and I paid $5,000 in mortgage interest this year, same total (gross) income, so we must both pay the same but we did not get a tax benefit from it because we took the amount in taxes. standard deduction