The tax formula for individuals contains the following:

a.Exemptions, credits, and deductions are subtracted from adjusted gross income to calculate taxable income.

b.The amount of the refund due is the gross tax liability added to credits.

c.Adjusted gross income minus deductions and less the qualified business income deduction is equal to taxable income.

d.Gross income minus deductions and minus exemptions is equal to the amount of adjusted gross income.

e.Gross income minus adjusted gross income equals taxable income.

For the most part, entities pay tax directly to the federal government. Which of the following does not usually pay tax to the federal government?

a.Individuals

b.Partnerships

c.Corporations

d.All of these entities are taxable entities.

Answer 1- c.Adjusted gross income minus deductions and less the qualified business income deduction is equal to taxable income.

Reason - For calculating taxable income for an individual for tax purpose, first the Adjusted Gross Income(AGI) is calculated and from that all the deductions in which the individual is qualified are deducted. After that, all the qualified business income deductions are also deducted to arrive at the taxable income on which the final tax for an individual is calculated.

Answer 2- b.Partnerships

Reason - The federal government collects income taxes from individuals, corporate tax from corporations. The partnerships don't pay their taxes directly to the federal government, the partners are individually liable to pay taxes directly to the federal government for the income earned from the share of income of the partnership. But the partnerships are not directly liable to pay taxes.