Multiple Choice
Which of the following payroll deductions is required by law?
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9. Current Liabilities
Payroll and Payroll Taxes
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Which of the following taxes is typically withheld from an employee's paycheck?
A
Property tax
B
Federal income tax
C
Excise tax
D
Sales tax
Verified step by step guidance1
Understand the concept of payroll taxes: Payroll taxes are taxes that employers are required to withhold from employees' paychecks and remit to the government. These typically include federal income tax, Social Security tax, and Medicare tax.
Identify the types of taxes listed in the problem: Property tax, federal income tax, excise tax, and sales tax.
Clarify the nature of each tax: Property tax is levied on real estate and is not withheld from paychecks. Excise tax is a tax on specific goods or activities, such as gasoline or tobacco, and is not related to payroll. Sales tax is a consumption tax on goods and services, paid by consumers at the point of sale, and is not withheld from paychecks.
Focus on federal income tax: Federal income tax is a tax on an individual's earnings and is typically withheld from an employee's paycheck by the employer. This is done to ensure compliance with tax laws and to simplify the tax payment process for employees.
Conclude that federal income tax is the correct answer: Based on the explanation above, federal income tax is the type of tax that is typically withheld from an employee's paycheck.
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