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Income and Taxes
| Term | Definition |
|---|---|
| BiWeekly | done, produced, or occurring every two weeks or twice a week. |
| Dependent | a person who depends on or needs someone or something for aid. someone who contributes all or a major amount of necessary financial support to other |
| Direct Deposit | payment option where your funds are electronically transferred to your checking or savings account |
| Earned Income | is any income from a job or self-employment |
| Employee | a person that works for a company |
| Employer | a person that looks and hires employees |
| Exemptions | an amount of money you can subtract from your Adjusted Gross Income |
| Federal Income Tax | tax levied by the United States Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts, and other legal entities |
| Federal Insurance Contributions Act (FICA) | FICA tax is the money that is taken out of workers' paychecks to pay older Americans their Social Security retirement and Medicare (Hospital Insurance) benefits. It is a mandatory payroll |
| Fringe Benefits | an extra benefit supplementing an employee's salary, for example, a company car |
| Gross Income | gross income is the sum of all wages, salaries, profits, interest payments, rents, and other forms of earnings, before any deductions or taxes |
| Hourly Wage | a rate an employer agrees to pay a worker per hour worked |
| Income Tax | a tax that governments impose on income. Income taxes are a source of revenue for governments |
| 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 | refers to an individual's income after taking taxes and deductions into account |
| Overtime Pay | money earned at an increased rate for working more than the usual number of hours in one week |
| Profit Sharing | a system in which the people who work for a company receive a direct share of the profits |
| Salary | a fixed amount of money or compensation paid to an employee |
| Sales Commissions | additional compensation the employee receives for meeting and exceeding the minimum sales threshold |
| Social Security Tax | 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 |
| Tips | extra income received for doing a good job |
| W2 Form | an official Wage and Tax Statement that reports an employee's annual wages and the amount of taxes withheld from their paycheck |
| W4 Form | an Internal Revenue Service (IRS) tax form completed by an employee in the United States to indicate his or her tax situation (exemptions, status, etc.) to the employer. |
| Withholding Allowance | refers to an exemption that reduces how much income tax an employer deducts from an employee's paycheck |
Created by:
smonroy21
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