Question

1. What is Effective Tax Rate?

A. the tax rate that applies to the next additional increment of a taxpayer’s taxable income.

B. the taxpayer’s average rate of taxation on each dollar of total income, both taxable and nontaxable

C. the taxpayer’s average level of taxation on each dollar of taxable income

   

D. the tax rate that applies only to corporations

2. David wants to support his tax deduction on his tax return using a primary tax authority source. What of the following should he use?

  

A. Revenue Ruling

   

B. RIA United States Tax Reporter

   

C. Tax Law Review

   

D. Journal of Accountancy

Answer 1

1. What is Effective Tax Rate? Answer C. the taxpayer's average level of taxation on each dollar of taxable income Explanation Effective tax rate is the average tax rate paid by an individual or corporation on their earned or taxable income. It has been calculated by applying the following formula Effective tax rate = Taxes paid / Taxable income 2. David wants to support his tax deduction on his tax return using a primary tax authority source. What of the following should he use? Answer B. RIA United States Tax Reporter Explanation It is designed for those tax professionals who wants to do income tax research using a code- based product. It also provides up-to-date source of federal income tax law via the Internal Revenue code, regulations committee reports etc. It provides instant access to the information you need