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Income and Taxes
| Term | Definition |
|---|---|
| Biweekly | done, produced, occurring 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 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 | the tax levied by the United States Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts, and other legal entities |
| FICA | (Federal Insurance Contribution Act tax) a U.S. federal payroll contribution directed towards both employees and employers to fund Social Security and Medicare |
| Fringe Benefits | an extra benefit supplementing an employee's salary; ex) a company car, subsidized meals, health care, etc. |
| Gross Income | an individual's total pay from their employer before taxes of other deductions |
| Hourly Wage | the rate an employer agrees to pay a worker per hour worked |
| Income Tax | tax levied by the government directly on income, especially an annual tax on personal income |
| Medicare Tax | a tax on wages that U.S. employers are liable to withhold from employees' paychecks to cover the costs of the Medicare program |
| Net Income | an entity's income minus cost of goods sold, expenses, depreciation and amortization, interest, and taxes for an accounting period |
| Overtime Pay | the amount of overtime paid to each employee in a pay period |
| Profit Sharing | a system un 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, especially a professional or white-collar worker |
| Sales Commissions | an additional compensation the employee receives for meeting and exceeding the minimum sales threshold |
| Social Security Tax | the tax levied on both employers and employees to fund the Social Security Program |
| Tax Deduction | a reduction of income that is able to be taxed and is commonly a result of expenses, particularly those incurred to produce additional income |
| Tips | a sum of money as a way of rewarding them for their services |
| W2 Form | the form that an employer must send to an employee and the IRS at the end of each year; the official Wage and Tax Statement that reports an employee's annual wages and the amount of taxes withheld from their paycheck |
| W4 Form | an IRS tax form completed by an employee in the U.S. to indicate his or her tax situation (exemptions, status, etc.) to the employer |
| Withholding Allowance | an exemptions that reduces how much income tax an employer deducts from an employee's paycheck |
| wage | a fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker |
Created by:
dkaiser20