23. identify whether each statement is true or false.\na. the marginal tax rate is the tax rate you pay on…

23. identify whether each statement is true or false.\na. the marginal tax rate is the tax rate you pay on the last dollar of your income: \n b. a person whose income falls in the 24% tax bracket will pay a total of 24% of their income in taxes: \n c. a tax deduction decreases a persons taxable income and decreases the amount they owe in taxes: \n d. a persons gross income is always higher than their taxable income: \n24. select all the strategies that are both legal and will reduce your tax liability.\n maximizing your pre - tax 401(k) contributions\n only reporting some of your earned income\n excluding cash tips from your income reporting\n claiming an education tax credit for your college tuition expenses\n choosing to take the itemized or standard deduction based on which is higher\n excluding interest earned on savings when filling your 1040\n25. fill in the blank: a $500 tax credit will reduce your tax bill (more than, less than, the same as) a $500 tax deduction.

23. identify whether each statement is true or false.\na. the marginal tax rate is the tax rate you pay on the last dollar of your income: \n b. a person whose income falls in the 24% tax bracket will pay a total of 24% of their income in taxes: \n c. a tax deduction decreases a persons taxable income and decreases the amount they owe in taxes: \n d. a persons gross income is always higher than their taxable income: \n24. select all the strategies that are both legal and will reduce your tax liability.\n maximizing your pre - tax 401(k) contributions\n only reporting some of your earned income\n excluding cash tips from your income reporting\n claiming an education tax credit for your college tuition expenses\n choosing to take the itemized or standard deduction based on which is higher\n excluding interest earned on savings when filling your 1040\n25. fill in the blank: a $500 tax credit will reduce your tax bill (more than, less than, the same as) a $500 tax deduction.

Answer

23.

Brief Explanations:

  • a. The marginal - tax rate is indeed the rate on the last dollar of income.
  • b. A person in a 24% tax - bracket pays 24% on the income in that bracket, not all of their income.
  • c. Tax deductions lower taxable income and thus lower tax liability.
  • d. Gross income minus deductions and exemptions equals taxable income, so gross income is usually higher.

Answer:

a. TRUE b. FALSE c. TRUE d. TRUE

24.

Brief Explanations:

  • Maximizing pre - tax 401(k) contributions reduces taxable income legally.
  • Only reporting some earned income and excluding cash tips and savings interest are illegal.
  • Claiming an education tax credit for tuition and choosing the higher of itemized or standard deduction are legal tax - reduction strategies.

Answer:

Maximizing your pre - tax 401(k) contributions Claiming an education tax credit for your college tuition expenses Choosing to take the itemized or standard deduction based on which is higher

25.

Brief Explanations:

A tax credit directly reduces the tax bill dollar - for - dollar. A tax deduction reduces taxable income, and the actual tax savings depends on the tax rate. So a $500 tax credit reduces the tax bill more than a $500 tax deduction.

Answer:

more than