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Income and Taxes
| Term | Definition |
|---|---|
| BiWeekly | A periodical that appears every two weeks or twice a week. |
| Dependent | A person who relies on another, especially a family member, 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, especially at a nonexecutive level. |
| Employer | A person or organization that employs people. |
| Exemptions | The process of exempting a person from paying taxes on a specified amount of income for themselves and their dependents. |
| FICA | The "Federal Insurance Contributions Act" is a U.S. law requiring a deduction from paychecks and income that goes toward the Social Security program and Medicare. |
| Fringe Benefits | An extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance, etc. |
| Gross Income | An individual's total personal income before taking taxes or deductions into account. |
| Hourly Wage | The rate an employer agrees to pay an employee per. hour worked. |
| Income Tax | Tax levied by a government directly on income, especially an annual tax on personal income. |
| Medicare Tax | The tax deducted from the wages of every legally working American that is used to pay for the Medicare program. |
| Net Income | An entity's income minus cost of goods sold, expenses and taxes for an accounting period. |
| Overtime Pay | The time and one-half of the employee's regular rate of pay. |
| 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, especial a professional or white-collar worker. |
| Sales Commissions | A fee paid to the broker or other financial agent for a negotiating sale. The fee is based on a percentage of the sale price. |
| Social Security Tax | The tax levied on both employers and employees used to fund the Social Security program. |
| Tax Deduction | The reduction of the income subject to tax, for various items, especially expenses incurred to produce income. |
| Tips | Extra amount of income given with a certain service provided, usually based around 15%. |
| W-2 Form | This form reports an employee's annual wages and the amount of taxes withheld from his or her paycheck. |
| W-4 Form | This form tells the employer the correct amount of tax to withhold from an employee's paycheck. |
| Withholding Allowance | Employee-claimed exemptions on the tax form employers use to determine how much of an employee's pay to subtract from his or her own paycheck to remit to the tax authorities. |
| Federal Income Tax | A tax levied by the United States Internal Revenue Service (IRL) on the annual earnings of individuals, corporations, trusts and other legal entities. |
Created by:
bdilorenzo15