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Income and Taxes
| Term | Definition |
|---|---|
| BiWeekly | Something that occurs once every two weeks |
| Dependent | Requiring someone or something 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 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 |
| Federal Income Tax | A tax service levied by the IRS on the annual earnings of individuals, trusts, and other legal enteties |
| FICA (Federal Insurance Contributions Act) | Tax money that is taken out of workers' paychecks to pay older Americans their Social Security retirement and Medicare (Hospital Insurance) |
| Fringe Benefits | an extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance |
| Gross income | Money earned before taxes |
| Hourly wage | Describes the rate that an employee is paid per hour they worked |
| Income tax | Tax levied by a government directly on income, especially an annual tax on personal income |
| Medicare Tax | A tax deducted from an employees that goes towards medical benefits |
| Net income | Income after taxes |
| Overtime pay | Overtime pay is 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 |
| Sales Commissions | A sales commission is additional compensation the employee receives for exceeding expectations |
| Social Security Tax | A Social Security tax is the tax levied on both employers and employees used to fund the Social Security program |
| Tax Deduction | A tax deduction is a reduction in tax obligation from a taxpayer's gross income |
| Tips | a sum of money given to someone as a reward for their services |
| W2 Forms | The W-2 form is the form that an employer must send to an employee and the Internal Revenue Service (IRS) at the end of the year |
| W4 Forms | It is used by your employer to withhold the proper amount of federal income tax from your 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 paycheck to remit to the tax authorities |
Created by:
bturner17
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