Understanding Income Tax
This worksheet introduces Grade 9 students to the basics of income tax, including its purpose, types, and how it impacts individuals.
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Understanding Income Tax
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Read each question carefully and answer to the best of your ability. This worksheet will help you understand the basics of income tax.
1. What is the primary purpose of income tax?
To fund private businesses
To provide goods and services for the public
To increase individual wealth
To regulate international trade
2. Which of the following is typically subject to income tax?
Gifts received from family
Wages and salaries
Lottery winnings
Inherited property
3. Income tax is a tax, meaning the tax rate increases as the taxable amount increases.
4. The government uses income tax revenue to fund public services like schools, roads, and .
5. Everyone pays the same percentage of their income in taxes, regardless of how much they earn.
True
False
6. Income tax is a direct tax because it is levied directly on an individual's income.
True
False
7. Briefly explain the difference between gross income and net income.
Use the words below to complete the sentences.
8. Income tax is a tax system, where higher earners pay a larger percentage of their income.
9. The total amount of money earned before any are taken out is called gross income.