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Progressive Tax Audit

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1. What is a progressive tax system? How does it differ from a regressive tax system? A progressive tax system is a system that requires people with higher incomes to pay a greater proportion of their income on taxes. This means that they look for people with really good jobs and make them pay more out of their checks on taxes. Regressive tax systems, are a little bit different. They charge everyone the exact same on taxes. This is your basic tax system.
2. What is gross income? What types of income are included in gross income? Gross income is basically the short version of all you sources of income. The types of income included in this, are other jobs, and investment income, received alimony, unemployment compensation, and so on. These are …show more content…

What is a tax audit? What are some different types of audits?
A tax audit is a detailed examination of a return by the IRS. Once asked to the IRS will have you provide information about your incomes, deductions, and other info. Once this happens they will do a check to see if it is true. However, if you took deductions you shouldn’t have, then you might get penalties or fines afterwards. This is why should manage you finances and record them all. A correspondence audit requires a person to respond via mail. An Office audit requires the person to go to the IRS building and give information. Lastly, there is a field audit, where they go to you house and question you.
5. What are two ways that a person's wealth may be taxed? Describe these taxes. A person’s income from a part-time job can be taxed. The way this happens is the person who gives out paychecks automatically takes that money out for tax. So that is money you will never see. Another way, is paying for groceries. When you buy something at the store, the clerk puts a certain tax on every grocery. So this gets added to the original cost of all the food. That extra then goes to …show more content…

What are some strategies that you can use to prepare to file taxes each year? What would be the benefits of these strategies?
One strategy would be to write down all your spendings that year. This way you know what you payed for and how much your taxes will be. That way if they say you are missing money for something you didn’t do or use, you can show them the chart and explain the mistake. It’s always good to have notes incase something goes wrong.

2. What are the benefits of taxes for societies and individuals?
Taxes do actually help our society. They help to pay the government, who pays to fix the roads. They also build bridges, and other services. It also helps individuals by giving some jobs as tax collectors, and a paycheck for those in the government.
3. How do taxes influence responsible financial planning? Discuss some examples of how taxes may influence a financial plan.
Taxes influence financial planning by teaches us how to manage our money. If we blow out money on useless junk, we won’t have enough money when taxes come around. However, if we spend our money wisely, and pay our taxes, then we know what to and not to do next time. It teaches us financial

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