About This Chapter
The Income Tax Model - Chapter Summary
Get an overview of the income tax model with this convenient online chapter. You'll examine income tax history, liability and deductions, as well as different tax types. These engaging and bite-sized lessons are taught by expert instructors who break down fundamental tax concepts in a way that's easy to understand and remember. You can work through the chapter at your own pace using any device that has an Internet connection. The chapter also includes lesson quizzes to help you check your understanding of these income tax model concepts. When you're finished, you should be able to:
- Summarize the history of income tax
- Evaluate tax liability and deductions
- Explain the progressive tax code
- Assess examples of alternative minimum tax
- Recognize the advantages and disadvantages of sin taxes
- Calculate property taxes and the present and future value of money
- Define average tax and marginal tax rates
1. History of Income Tax
If you have looked at your paycheck closely, you have noticed that the government has taken a portion of your income. In this lesson you will learn about the history, purpose, and benefits of income taxes. Then, take a short quiz to see what you learned.
2. Income Tax: Tax Liability & Deductions
In this lesson, we'll discuss allowable deductions that reduce taxable income. You'll learn about each deduction and its limitations. We'll also explore how to calculate tax liability after subtracting deductions.
3. Understanding the Progressive Tax Code
In this lesson, learn what a progressive tax code is, how to recognize it, and what the alternatives are. Then, learn the differences between the three tax codes: progressive, regressive and proportional. Finally, learn how sales tax would impact progressivity.
4. Alternative Minimum Tax: Definition & Example
Despite having been around for more than 50 years, the alternative minimum tax has only recently been updated. In this lesson, learn exactly what it is and see an example of it at work.
5. Sin Taxes: Definition, Pros & Cons
Learn about what sin taxes are and how you might be paying them without even realizing it. Find out why these taxes are used and the common arguments for and against them.
6. Property Taxes: Calculations & Rates
Depending on where you live, the property taxes for houses are calculated differently. Watch this video lesson to see how the calculations are made based on some example rates.
7. Average Tax Rate: Definition & Formula
Knowing the average tax rate in a progressive tax system is useful in understanding your tax burden. In this lesson, you'll learn about the average tax rate, related concepts, and how to calculate it. A short quiz follows.
8. What is a Marginal Tax Rate? - Definition & History
Most Western countries use tax brackets and marginal tax rates as the basis of their tax code. In this lesson, you'll learn the definition of marginal tax rate and its history in the United States.
9. Present and Future Value: Calculating the Time Value of Money
A central concept in business and finance is the time value of money. We will use easy to follow examples and calculate the present and future value of both sums of money and annuities.
Earning College Credit
Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.
To learn more, visit our Earning Credit Page
Transferring credit to the school of your choice
Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.
Other chapters within the Accounting 307: Federal Income Taxes course