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Income and Taxes
-- Finance
| Term | Definition |
|---|---|
| Biweekly | Every two weeks or twice a week. |
| Dependent | is a person, other than the taxpayer or their spouse, whom a taxpayer claims for tax benefits, such as certain tax credits. |
| 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 income tax | It is a mandatory payment to the U.S. government, administered by the Internal Revenue Service (IRS), based on the annual earnings of individuals, corporations, trusts, and other legal entities |
| FICA (abbreviation and definition) | The abbreviation is for the Federal Insurance Contributions Act. It is a U.S. federal payroll tax that funds the Social Security and Medicare programs, which provide benefits for retirees, the disabled, and children/survivors |
| Fringe Benefits | Non-salary compensation provided by an employer to an employee, such as health insurance, paid time off, and retirement plans, that adds value beyond the employee's regular wages. |
| Gross income | The total of all income received from any source before taxes or deductions |
| Hourly wage | The amount of money an employee earns for each hour they work. |
| Income tax | Tax levied by a government directly on income, especially an annual tax on personal income. |
| Medicare tax | A percentage of gross wages that all employees, employers and self-employed workers must pay to fund Medicare. |
| Net income | The amount of money a person or business has left after all costs, expenses, and taxes have been deducted from their gross income |
| Overtime pay | Money earned at an increased rate for working more than the usual number of hours in a week. |
| Profit sharing | A system where an employer distributes a portion of the company's profits to its eligible employees |
| Salary | A fixed, regular payment an employer makes to an employee for their work, typically paid on a set schedule like weekly, bi-weekly, or monthly. |
| Sales commissions | A performance-based payment for completing a task, usually selling goods or services |
| Social security tax | A type of payroll tax paid by employers and employees—including self-employed individuals—to fund the US Social Security program |
| Tax deduction | A tax deduction is an amount that a taxpayer can subtract from their total (gross) income to arrive at their taxable income |
| Tips | a sum of money customarily given by a customer to certain service sector workers such as hospitality for the service they have performed, in addition to the basic price of the service |
| W2 form | a United States federal wage and tax statement that an employer must give to each employee and also send to the Social Security Administration (SSA) every year. its your total annual wages and the amount of taxes withheld from your paycheck. |
| W4 form | an Internal Revenue Service (IRS) form that employees complete to inform their employer of the correct amount of federal income tax to withhold from their paycheck. |
| Withholding | the income an employer takes out of an employee's paycheck and remits to the federal, state, and/or local government. |
Created by:
Helll
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