Charlie is claimed as a dependent on his parents\' tax return in 2014. He receiv
ID: 2604643 • Letter: C
Question
Charlie is claimed as a dependent on his parents' tax return in 2014. He received $8,000 during the year from a part-time acting job, which was his only income. What is his standard deduction?
$1,050
$6,300
$8,000
$8,350
Question 20 (4 points)
Which of the following taxes is regressive?
Federal Insurance Contributions Act (FICA)
Excise tax
Property tax
Gift tax
$1,050
$6,300
$8,000
$8,350
Question 20 (4 points)
Which of the following taxes is regressive?
Federal Insurance Contributions Act (FICA)
Excise tax
Property tax
Gift tax
Explanation / Answer
Solution:
For a dependent, the standard deduction is the greater of Income earned plus $350 or $1,000, but no more than the current year regular standard deduction amount. for 2014, the maximum standard deduction for a single person is $6,300.
Solution 20:
A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases. "Regressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from high to low, so that the average tax rate exceeds the marginal tax rate.
Therefore Federal Insurance Contributions Act (FICA) is the regressive tax as for upper income wage earners, the Social Security tax ceases at a maximum wage base.