Multiple Choice
When managing your personal finances, you should always make sure you have a _____ to help track your income and expenses.
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1. Introduction to Accounting
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In addition to federal income tax, many people also pay:
A
No other taxes
B
State income tax
C
Sales tax on federal tax returns
D
Only property tax
Verified step by step guidance1
Understand the context of the problem: The question is asking about additional taxes that people commonly pay alongside federal income tax. This is a conceptual question related to taxation in financial accounting.
Clarify the types of taxes mentioned: Federal income tax is mandatory for most individuals, but there are other taxes such as state income tax, sales tax, and property tax that may also apply depending on the jurisdiction and individual circumstances.
Focus on state income tax: State income tax is a common additional tax paid by individuals in many states. It is separate from federal income tax and is determined by state-specific regulations.
Exclude sales tax on federal tax returns: Sales tax is typically paid at the point of purchase and is not reported on federal tax returns. This eliminates it as a correct answer in this context.
Exclude property tax: Property tax is paid by individuals who own property, but it is not universally applicable to all taxpayers. It is also not directly related to federal income tax filings.
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