Taxation and Financial Responsibilities Quiz

Direct taxes are imposed directly on individuals or entities and cannot be transferred to another taxpayer.

Tax credits directly reduce the amount of tax owed, providing a more significant benefit than deductions.

Tax returns provide a summary of income, deductions, credits, and tax liability for a specific period.

VAT is a consumption tax levied on the value added to goods and services at each stage of production and distribution.

Tax treaties establish rules for taxing income, preventing double taxation, and promoting cooperation between countries.

Form W-2 is used by employers to report wages, tips, and other compensation paid to employees as well as taxes withheld.

Tax deductions lower the amount of income that is subject to taxation, thus reducing the tax liability.

GST aims to streamline the taxation system by subsuming various indirect taxes into a single tax.

Tax credits lower the tax liability dollar-for-dollar, whereas deductions lower the taxable income.

Progressive taxation imposes higher tax rates on higher-income individuals, resulting in a greater tax burden for them.

CAG audits government accounts, ensuring proper use of public funds and transparency in financial matters.

Regressive taxes impose a greater burden on lower-income individuals as a percentage of their income.

FASB establishes standards for financial accounting and reporting to provide reliable and relevant information to investors and stakeholders.

Indirect taxes are levied on goods and services, with the cost ultimately borne by consumers.

The IRS is responsible for enforcing the tax laws enacted by Congress and collecting taxes to fund government operations.

Form 1040 is the standard form used by individuals to file their annual income tax returns in the United States.

A fiscal year is any 12-month period chosen for financial reporting, while a calendar year follows the usual January to December timeframe.