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Income Tax Vocab
| Term | Definition |
|---|---|
| Income Tax | Annual charge levied on both earned income (wages, salaries, commission) and unearned income (dividends, interest, rents). |
| Progressive Tax | Income tax that takes a larger percentage of a larger income and a smaller percentage of a smaller income. |
| Regressive Tax | Taxation that takes a larger percentage of a lower-income and a smaller percentage of a higher income. |
| 1040EZ | simplest of the three tax forms you can use to file your federal income taxes. If your taxable income is less than $100,000, you don't claim any dependents and you file as single or are married filing jointly, then you may be eligible |
| Income | The flow of cash or cash-equivalents received from work (wage or salary), capital (interest or profit), or land (rent). |
| Adjusted Gross Income | Tax payer's total income from which certain sums such as student loan interest payments (but not allowed or standard deductions) have been subtracted. |
| W2 Form | reports an employee's annual wages and the amount of taxes withheld from his or her paycheck. |
| Deduction | Fixed amount or percentage permitted by taxation authorities that a tax payer can subtract from his or her adjusted gross income to arrive at the taxable income. |
| Standard Deduction | amount is usually pegged to the inflation rate, and varies with the tax payer's category such as single individual, married couple filing together, married couple filing separately, head of household. |
| Direct Deposit | Automatic transfer of salaries, wages, rents, benefits, or other such sums, directly to the account of an employee or beneficiary. |
| Filing Status | category that defines the type of tax return form a taxpayer must use when filing his or her taxes, marital status |
| FICA | A law that mandates payroll taxes, which help to fund security and Medicare benefits. |
| Withholdings | Holding back money designated for the payment of taxes. |
| Internal Revenue Service | The U.S. government agency authorized to collect federal income taxes and enforce the tax laws embodied in the IRS Code. |
| Taxable Income | amount of income used to calculate how much tax an individual or a company owes to the government in a given tax year. |
| Tax Credit | Prepaid income tax (such as that deducted from dividend payment) that can be offset against the total income tax payable by an entity. |
Created by:
s.calvin.brown
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