Question

Why is federal income tax more daunting for business owners than other types of tax?Select an answer:The tax code does not allow for deductions.Income tax lowers a company's profitability.The federal tax code is expansive.Income tax terms are not defined.

Answer 1

Federal income tax are more daunting for business owners than other types of tax because the tax terms are not defined. The Option D is correct.

What Is Federal Income Tax?

It is a tax levied by Internal Revenue Service on annual earnings of individuals, corporations, trusts, and other legal entities. This taxes applies to all forms of earnings that make up a taxpayer's taxable income including wages, salaries, commissions, bonuses, tips, investment income etc.

In 2022 year, there are 7 federal tax brackets which includes 10%, 12%, 22%, 24%, 32%, 35% and 37%.

Read more about income tax

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