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Income Tax Unit
| Term | Definition |
|---|---|
| Income Tax | Annual charge levied on both earned income (wages, salaries, commission) and unearned income (dividends, interest, rents) Progressive Tax |
| 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 Form | Income tax return for single and joint filers with no dependents |
| 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 | This form shows the amount of an individual's earnings and deductions |
| 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 | Fixed amount that a tax payer is allowed to deduct from his or her adjusted gross income |
| Direct Deposit | Automatic transfer of salaries, wages, rents, benefits, or other such sums, directly to the account of an employee or beneficiary |
| Filing Status | The types of taxpayers: single, married filing jointly, married filing separately, and head of household |
| 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 | Gross income from which standard deductions and other allowances have been subtracted |
| 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.whitney.mckinley
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