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PF C12
Income Tax Vocabulary
| Term | Definition |
|---|---|
| Tax Liability | total amount of taxes owed |
| estate tax | federal tax collected on the value of a person's property at the time of his/her death |
| inheritance tax | a state tax collected on the property left by a person to his/her heir(s) in a will |
| income tax | a form (1040; 1040EZ) on which a taxpayer reports how much money he/she received from working and other sources and exact taxes that are owed |
| exclusion | tax-exempt income or income that is not subject to taxes |
| adjusted gross income | gross income after calculating certain reductions |
| taxable income | adjusted gross income less any allowable tax deductions and exemptions |
| tax deduction | an expense that you can subtract from your adjusted gross income to figure taxable income |
| standard deduction | an amount of money set by the IRS that is not taxed |
| itemized deduction | a specific expense that you deduct from your adjusted gross income |
| exemption | a deduction from adjusted gross income for the taxpayer, the spouse and qualified dependents |
| tax credit | amount of money that can be subtracted directly from taxes you owe |
| allowance | an adjustment to tax withheld from your paycheck, based on marital status and dependents |
| extension | an extended deadline for filing an income tax return |
| tax audit | a detailed examination of your tax return by the IRS |
Created by:
Ckonie
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