Multiple Choice
Why might an employee voluntarily have money deducted from their paycheck?
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9. Current Liabilities
Payroll and Payroll Taxes
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following is a type of federal payroll tax?
A
Progressive tax
B
Sales tax
C
Medicare tax
D
Property tax
Verified step by step guidance1
Understand the concept of federal payroll taxes: Federal payroll taxes are taxes imposed by the government on employers and employees to fund specific programs such as Social Security and Medicare.
Identify the types of taxes listed in the problem: Progressive tax, Sales tax, Medicare tax, and Property tax.
Clarify the nature of each tax: Progressive tax is based on income levels, Sales tax is applied to goods and services, Medicare tax is a federal payroll tax used to fund Medicare, and Property tax is levied on property ownership.
Focus on Medicare tax: Medicare tax is specifically categorized as a federal payroll tax, which is deducted from employees' wages and matched by employers to fund healthcare for individuals aged 65 and older.
Conclude that Medicare tax is the correct answer based on its classification as a federal payroll tax, distinct from the other types of taxes listed.
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