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Chapter 5
Consumers
Term | Definition |
---|---|
Allowance | A number that you calculate on a Form W-4 that reduces the amount withheld from your pay |
Deduction | Any expenses you can legally subtract from your income when figuring your taxes |
Dependent | For taxes purposes, the people you support finacially |
Form W-2 | A summary of your earnings and withholdings for the year for a job |
Form W-4 | A form that you fill out to provide the information your employer needs to determine the proper amount to withhold from your paycheck |
Gross Income | Amount you earn before taxes are withheld |
Internal Revenue Service | Federal agency responsible for collecting income taxes |
Net Income | Amount you receive after withholdings are subtracted form your gross pay |
Withholding | Employer deductions from employees' earnings to pay employees' taxes |