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income and taxes
| Term | Definition |
|---|---|
| Biweekly | done, produced, or occurring every two weeks or twice a week |
| Dependent | a person who relies on someone else for financial support |
| Direct Deposit | the electronic transfer of a payment directly from the account of the payer to the recipient's account. |
| Earned Income | money derived from paid work. |
| Employee | a person employed for wages or salary |
| Employer | person or organization that employs people. |
| Exemptions | reduces the amount of income that is subject to income tax. |
| Federal Income Tax | a marginal tax or progressive tax and apply to all forms of earnings that make up a taxpayer's taxable income |
| FICA | Federal Insurance Contributions Act- a U.S. federal payroll tax deducted from each paycheck. |
| Fringe Benefits | an extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance, etc |
| Gross Income | is an individual's total earnings before taxes or other expenses |
| Hourly Wage | a set hourly rate which is multiplied by the hours worked during a pay period |
| Income Tax | tax levied by a government directly on income |
| Medicare Tax | a percentage of gross wages that all employees, employers and self-employed workers must pay to fund Medicare |
| Net Income | sales minus cost of goods sold, general expenses, taxes, and interest. |
| Overtime Pay | the compensation you receive for working beyond normal working hours |
| Profit Sharing | a system in which the people who work for a company receive a direct share of the profits |
| Salary | a fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee |
| Sales Commissions | the amount of compensation paid to a person based on the amount of sales generated |
| Social Security Tax | a percentage of gross wages that most employees, employers and self-employed workers must pay to fund the federal program. |
| Tax Deduction | an item you can subtract from your taxable income to lower the amount of taxes you owe |
| Tips | a sum of money customarily given by a customer to certain service sector workers such as hospitality for the service they have performed, in addition to the basic price of the service. |
| W2 Form | shows important information about the income you've earned from your employer, amount of taxes withheld from your paycheck, benefits provided and other information for the year |
| W4 Form | an IRS form that you complete to let your employer know how much money to withhold from your paycheck for federal taxes |
| Withholding | the income an employer takes out of an employee's paycheck and remits to the federal, state, and/or local government |
Created by:
Rbeadle24
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