Final answer:
True, knowledge of individual income taxes is very relevant to financial planning as it directly affects personal net income, tax liability, and can influence financial decisions such as saving and investing.
Step-by-step explanation:
The statement that knowledge of individual income taxes is somewhat relevant to financial planning is actually true. When it comes to financial planning, understanding how income taxes work is crucial because it affects how much money individuals get to keep and how much they must give to the government. As the income levels of individuals increase, so does the amount of tax they pay, highlighting the progressive nature of the income tax system. Additionally, with increased income comes a higher fraction of that income being taxed, which should be considered in financial decision-making. Therefore, having an in-depth understanding of taxes helps individuals to make informed choices regarding saving, investing, and managing expenses.
For example, when planning for retirement, it's vital to know how taxation on retirement savings and withdrawals will impact one's income during those years. Moreover, tax deductions and credits can significantly influence the final tax liability, so knowing how to navigate these can lead to better financial outcomes.