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Lesson_1 - Q5. How does the pay-as-you-go procedure apply...

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Q5. How does the pay-as-you-go procedure apply to wage earners? To persons who have income from other than wages? For wage earners, the tax law requires employers to withhold a specified dollar amount from wages paid to the employee to cover income taxes and payroll taxes. Persons with non-wage income generally are required to make quarterly payments to the IRS for estimated taxes. Both procedures ensure that taxpayers will be financially able to meet their annual tax liabilities. That is, the amounts withheld are meant to repay the employee’s income taxes and payroll taxes related to the wages earned. Q7. Are the following taxes proportional or progressive? a. FICA tax proportional b. Federal corporate income tax progressive c. Federal gift tax progressive d. General sales tax proportional Q27. A state that uses a “piggyback” approach to its income tax has “decoupled” from a recent change in the Internal Revenue Code. a. What does this mean? The ‘‘piggyback’’ approach means that a state income tax makes use of what has been done for Federal income tax purposes. To ‘‘decouple’’ means that the state will not adopt, for state income tax purposes, the recent Federal income tax change. b.
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Lesson_1 - Q5. How does the pay-as-you-go procedure apply...

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