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Income and Taxes
Term | Definition |
---|---|
BiWeekly | done, produced, or occurring every two weeks or twice a week |
Dependant | a person who relies on another as a primary source of income |
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 freeing or state of being free from an obligation or liability imposed on others |
Federal Tax Income | the annual earnings of individuals, corporations, trusts, and other legal entities |
FICA | Federal Insurance Contributions Act. the money that is taken out of workers' paychecks to pay older Americans their Social Security retirement and Medicare |
Fringe Benefits | an extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance, etc. |
Gross Income | the amount of money you earn before anything is taken out for taxes or other deductions |
Hourly Wage | a rate an employer agrees to pay a worker per hour worked |
Income Tax | tax levied by a government directly on income, especially an annual tax on personal income. |
Medicare Tax | tax on wages that U.S. employers are liable to withhold from employees' paychecks to cover the costs of the Medicare program |
Net Income | the residual amount of earnings after all expenses have been deducted from sales |
Overtime Pay | the amount of overtime paid to each employee in a pay period |
Profit Sharing | a system in 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 |
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 | deduction that lowers a person's tax liability by lowering his taxable income |
Tips | a sum of money given to someone as a reward for their services |
W2 Form | form that an employer must send to an employee and the Internal Revenue Service (IRS) at the end of each year |
W4 Form | an Internal Revenue Service (IRS) tax form completed by an employee in the United States to indicate his or her tax situation |
Withholding Allowance | an exemption that reduces how much income tax an employer deducts from an employee's paycheck |