Tax Assistant Interview Questions and Answers

Taxation is chosen based on the type of income, deductions, and credits available to the taxpayer.

• Consider the type of income (e.g. wages, capital gains, rental income)

• Look at available deductions (e.g. charitable contributions, mortgage interest)

• Take into account credits (e.g. child tax credit, earned income credit)

• Review tax laws and regulations to ensure compliance

• Consult with a tax professional for guidance

Tax rate is the percentage at which an individual or business is taxed on their income or profits.

• Tax rate varies depending on the income level and type of income

• Tax rates can be progressive, regressive or flat

• Tax rates can be different for federal, state and local taxes

• For example, the federal income tax rate for 2021 ranges from 10% to 37% depending on income level

LTCG stands for Long Term Capital Gains and STCG stands for Short Term Capital Gains.

• LTCG is the profit earned from the sale of an asset held for more than a year.

• STCG is the profit earned from the sale of an asset held for less than a year.

• LTCG is taxed at a lower rate than STCG.

• Example: Selling a stock after holding it for 2 years would result in LTCG, while selling it after 6 months would result in STCG.

LTCG is tax on profits from assets held for over a year, while STCG is tax on profits from assets held for less than a year.

• LTCG is taxed at a lower rate than STCG.

• LTCG is applicable on assets held for more than a year, while STCG is applicable on assets held for less than a year.

• LTCG is calculated by subtracting the purchase price from the selling price, while STCG is calculated by subtracting the purchase price from the selling price and adding any applicable fees or commis...read more