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Income and Taxes
| Question | Answer |
|---|---|
| An allowance an individual claims on a W-4 form. | Allowance |
| A tax imposed by the federal government upon companies with retained earnings deemed to be unreasonable and in excess of what is considered ordinary. | Accumulated Earnings |
| A service charge assessed by a broker or investment advisor in return for providing investment advice and/or handling the purchase or sale of a security. | Commissions |
| Any item or expenditure subtracted from gross income to reduce the amount of income subject to tax. | Deduction |
| An individual whom a taxpayer can claim for credits and/or exemptions. A dependent is an individual, such as a qualifying child, whom a taxpayer can claim on his or her federal and some state income tax returns. | Dependent |
| Electronic funds that are deposited directly into your bank account rather than through a paper check | Direct Deposit |
| Income derived from active participation in a trade or business, including wages, salary, tips, commissions and bonuses. This is the opposite of unearned income. | Earned Income |
| A person employed for wages or salary, esp. a nonexecutive. | Employee |
| A person or organization that employs people. | Employer |
| A deduction allowed by law to reduce the amount of income that would otherwise be taxed | Exemptions |
| A tax levied by the United States Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts and other legal entities. | Federal Income Tax |
| A U.S. law requiring a deduction from paychecks and income that goes toward the Social Security program and Medicare. Both employees and employers are responsible for sharing the FICA payments. | FICA |
| An individual's total personal income before taking taxes or deductions into account. | Gross Income |
| Economic wealth that is generated in exchange for an individual's performance of agreed upon activities or through investing capital | Income |
| U.S. federal health program | Medicare Tax |
| A company's total earnings (or profit). Net income is calculated by taking revenues and adjusting for the cost of doing business, depreciation, interest, taxes and other expenses. | Net Income |
| Social Security tax is usually collected in the form of payroll tax or self-employment tax. The Social Security tax pays for the retirement and disability benefits received by millions of Americans each year. | Social Security Tax |
| The form that an employer must send to an employee and the IRS at the end of the year. | W-2 Form |
| A form completed by an employee to indicate his or her tax situation (exemptions, status, etc.) to the employer. | W-4 Form |
| The portion of an employee's wages that is not included in his or her paycheck because it is remitted directly to the federal, state and local tax authorities. | Withholding |
Created by:
SNAnderson
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