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unit 3
taxes
| Term | Definition |
|---|---|
| W-2 | form filled out by employer to report tax deductions from paycheck and annual income |
| W-4 | form filled out when you first begin a job to tell employer how much of your paycheck goes to taxes |
| Allowance | amount you try to decrease income to minimize taxation |
| 1040EZ | filled out when single/married, claim no dependents and make under 100,000 |
| 1040A | federal income tax return from: you CAN claim dependents, make under 100,000 |
| 1040 | filled out when you make over 100,000 |
| IL 1040 | state income tax return form specifically for Illinois |
| Standard Tax Deduction | non-itemized tax subtracted from income after filling out the 1040 EZ |
| Itemized Tax Deduction | taxpayers can claim on federal income tax returns and which decrease their taxable income, |
| Unemployment Compensation | unemployed worker (job lay-ff) who still gets 65%of their salary |
| Adjusted Gross Income | gross income subtracted by tax deductions |
| Taxable Income | amount of income used to determine someone's state/federal income tax |
| 1099-INT | bank sends this to investor to tell them their interest income for the calendar year |
| 1099-DIV | form from investment fund companies that tells investor the total number of capital gains and dividends paid to them |
| Tax Refund | IRS sends you money back |
| Tax Liability | you owe IRS money after paying taxes |
| Tax Deferred | tax that can be paid at a later date |
| Tax Exempt | not taxed |
| Tax Credit | money that can reduce the amount of money you owe the IRS (tax liability) |
| Wages/ tips | earned income you earn from tips, hourly wages, bonuses, etc. |
| Internal Revenue Service- IRS | department of treasury in the federal government |
| Tax Audit | meeting with taxpayer and IRS person to verify the 1040s are correctly filled out |
| Tax Extension | 6 months after 4/15 to fill out paperwork, but taxes are still due 4/15. |
| Property Tax | tax on all property you own to local government |
| Sales Tax | State tax on consumer goods purchased |
| Local Income Tax | local tax that local authority determines whether to raise money for local programs or not |
| State Income Tax | everyone is taxed the same amount in a specific state. |
| Federal Income Tax | amount of money made annually collected for the IRS |
| Estate Tax | federal income tax collected on the estate of the dead before it is given to anyone on the will |
| Inheritance Tax | State income tax on amount you received from someone's dead will when you inherit their property |
| Gift Tax | federal income tax when you transfer money and it passes the limit of 14,000 |
| Excise Tax | state/local tax paid when you purchase a specific good such as gas, cigarettes, etc. |
| Progressive Tax | Federal Income tax where greater income= higher tax rate |
| Regressive Tax | greater income=lower tax rate |
| Proportional Tax | flat tax that everyone pays that same percentage of taxes (state income tax) |
Created by:
jasedemasson
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