If Diane Was in a 25% Tax Bracket and Received

question 39

Multiple Choice

If Diane was in a 25% tax bracket and received a $1,000 tax credit, by how much would her taxes be reduced?

• A) $25
• B) $50
• C) $250
• D) $500
• E) $1,000

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Definitions:

Limited Partners

Investors in a partnership who have limited liability to the extent of their investment and are not involved in day-to-day management decisions.

Limited Partnership

A partnership where at least one partner has limited liability for the debts of the business, while at least one other has full liability.

S Corporation

is a type of corporation in the United States that elects to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code, allowing income to be passed through to shareholders and taxed at individual rates.

Federal Income Tax

A charge imposed by the federal government of the United States on the yearly income of entities such as individuals, corporations, trusts, and various legal bodies.