What taxes does the Income Tax report project?

• A. State taxes only
• B. Federal, capital gains, dividends, and other income taxes
• C. Sales and property taxes
• D. Local taxes only

Answer: (B)

Taxes tied to income that the federal government imposes. The Income Tax report project is designed to estimate the federal tax burden arising from different income sources, including ordinary federal income tax on wages and other earned income, taxes on investment income such as capital gains and dividends, and any other federal income taxes that apply. This is why the report focuses on federal, capital gains, dividends, and other income taxes. It doesn’t cover sales or property taxes (which are not part of the federal income tax calculation) and isn’t limited to local or state taxes, which are typically shown in different sections or reports. For example, capital gains from selling investments and taxes on dividend income are included, as is the federal tax on regular income from wages.