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MFLD MOD1
Module 1 Intro to Finance
| Term | Definition |
|---|---|
| Community | a group of people working together for a common good |
| Deductions | The amount of money subtracted or deducted from the gross pay for mandatory systematic taxes, employee sponsored medical benefits, and/or retirement benefits |
| Dependent | person who relies on the taxpayer for financial support |
| Earned income | money earned from working for pay |
| Education goals | enable individuals to prepare for future success in the workplace |
| Excise taxes | taxes charged on consumption items |
| Fed OASDI/EE or Social Security | The nation’s retirement program- This tax helps provide retirement income for elderly and pays disability benefits- Social Security taxes are based upon a percentage (6_2%) of the employee’s gross income- The employer matches the contribution made by the |
| Federal Withholding Tax | The amount required by law for employers to withhold from earned wages to pay taxes- This represents the largest deduction withheld from an employee’s gross income- The amount withheld depends upon two things: the amount of money earned and the informatio |
| FICA (Federal Insurance Contribution Act) | This tax includes two separate taxes: Fed OASDI/EE or Social Security and Fed MED/EE or Medicare- These two taxes can be combined as one line item or itemized separately on a paycheck stub |
| Financial goals | specific objectives to be accomplished through financial planning |
| Form I-9 | the Employment Eligibility Verification Form used to verify the eligibility of individuals and to avoid hiring undocumented workers |
| Form W-4 | also known as an Employee’s Withholding Allowance Certificate- The information provided on this form determines the percentage of gross income to be withheld for taxes |
| Goal | defined as the end result of something a person intends to acquire, achieve, do, reach, or accomplish |
| Gross Pay | The total amount of money earned during the pay period before deductions- If a person earns an hourly wage, gross pay is calculated by multiplying the number of hours worked by the wage include food, water, and shelter |
| Income tax | tax on earned and unearned income |
| Internal Revenue Service(IRS) | governmental agency responsible for collecting federal taxes, issuing regulations, and enforcing tax laws written by the United States Congress |
| Long-term goals | specified as more than one year |
| MED/EE or Medicare | The nation’s health care program for the elderly and disabled- This tax provides hospital and medical insurance to those who qualify- Medicare taxes are based upon a percentage (1_45%) of the employee’s gross income |
| Medical | The amount taken from the employee’s paycheck for medical benefits- This occurs when the employer has a medical plan for employees, but does not pay full coverage for his/her benefits |
| Need | something thought to be a necessity or essential items required for life |
| Net Pay | The amount of money left after all deductions have been withheld from the gross pay earned in the pay period |
| Pay Period | The length of time for which an employee’s wages are calculated usually weekly, bi-weekly, twice a month, or monthly |
| Payroll card | prepaid card that is offered to employees as an alternative to paper paychecks or directly depositing wages into an employee’s depository institution account |
| Payroll tax | tax on earned income that supports the Social Security and Medicare programs |
| Personal Information | States the employee’s full name, address, and Social Security or Employee Identification number |
| Property tax | is a tax on property, such as land, buildings (including homes), and motor vehicles (automobiles, boats, etc) |
| Retirement Plan | The amount an employee contributes each pay period to a retirement plan- A specified percentage of the contribution is often matched by the employer- This may be a 401K, state, or local retirement plan |
| Salary | Employee earning a set amount for a specified time period |
| Sales tax | a tax on items purchased in retail stores |
| Short-term goals | specified as less than one year |
| Smart cards | Most payroll cards are smart cards, which have money electronically loaded onto them each pay period with funds automatically deducted from the balance when a purchase is made |
| State Withholding Tax | The percentage deducted from an individual’s paycheck to assist in funding government agencies within the state- The percentage of deduction depends upon the amount of gross income the employee has earned |
| Taxes | sum of money demanded by a government to support the government itself as well as specific facilities or services |
| Taxpayer | a person who pays a tax to national, state, county or municipal (city/town) governments |
| Unearned income | income received from sources other than employment |
| Value | a fundamental belief or practice about what is desirable, worthwhile, and important to an individual |
| Want | something unnecessary but desired or items which increase the quality of living |
| Well being | The idea of living a good and happy life |
| Year-to-Date | Totals all of the deductions which have been withheld from an individual’s paycheck from January 1 to the last day of the pay period indicated on the paycheck stub |
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Literacy.Financial
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