ACCT 405 Master Flashcards

FA '26

AI Literacy

Ability to evaluate, apply, and oversee AI technology in a professional context and translate its technical out into sound business judgement

How can AI help your career?

Automate routine tasks so you can focus on interpretation, judgement, outcomes, and complex answers

What can AI do well?

Record meetings, summarize information, analyze data and identify trends, and generate reports.

What does it not do well?

Provide nuanced judgement and intuition, cannot think critically or creatively, create interpersonal relationships with clients, give a strategic vision, deliver emotional understanding.

16th Amendment in 1913

This amendment began the Federal Income Tax which would give revenue for the government.

Federal Income Tax was originally meant for wealthier citizens, so why did it become a universal tax?

The government needed more funding after losing money from World War 2.

Withholding

The money employers take from your paycheck to pay taxes

W-4 Form

The tax form filled out by employers to tell the employer how much to withhold via personal information

Estimated quarterly payments

the money a self-employed person sends quarterly to cover their tax liability

Tax base

the amount to which the tax rate is applied (aka taxable income)

Progressive (federal) tax rate

As income goes up, the applicable tax rate goes up

What are the federal tax brackets?

10% , 12%, 22%, 24%, 32%,35%, 37%

Marginal Tax Rate

The highest tax rate to which a client’s income is subject

Proportional tax rate

As income goes up, the applicable tax rate stays flat

Regressive tax rate

As income goes up, the applicable tax rate decreases

Taxable income is different than gross income in that…

It signifies that not all income is taxable

What is FICA?

FICA is the Federal Income Contributions Act (aka Social Security)

What does OASDHI?

Old Age, Survivors, Disability, Health Insurance (Medicare)

What is the OASD tax rate?

6.2% which is paid by both employee and employer

What is the HI tax rate?

1.45% which is paid by both employee and employer

What is the additional HI Tax?

When wages exceed 250,000 (MFJ) or 200,000 (MFS), the employee will have an additional 0.9% applied

What is SECA?

Self-Employment Contributions Act

What is the SECA Tax Rate?

In the case of sole proprietor, they will pay 12.4% and 2.9%

What is the number for the taxable wage base?

$184,500