What tax is deducted solely from employees' wages?

Prepare for the Michigan Builders License Exam. Study with flashcards and multiple choice questions, each question having hints and explanations. Get ready for your exam!

The explanation for why income tax is the correct answer lies in understanding the nature of the taxes involved. Income tax is indeed deducted directly from employees' wages as a withholding tax, which is determined by the employee's earnings and personal tax situation. This tax is collected by employers and then paid to the government on the employee's behalf.

In contrast, Social Security tax and Medicare tax are also withheld from employees' paychecks, but they are specifically earmarked for particular federal programs providing benefits to retirees, disabled individuals, and others. While they are deducted from wages, the primary focus of the question is on taxes that are generally classified as income tax.

Sales tax, on the other hand, is not deducted from wages. Instead, it is a consumer tax imposed on the sale of goods and services and is collected at the point of sale. Therefore, it does not relate to employment income or wage deductions.

Understanding these distinctions clarifies why income tax is identified as the tax deducted solely from employees' wages while the other options are related but do not fit the specific criteria of the question.

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