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Income and taxes
| Term | Definition |
|---|---|
| Biweekly | done, produced, or occurring every two weeks or twice a week. |
| dependent | a person (other than the taxpayer or their spouse) who relies on the taxpayer for more than half of their financial support |
| direct deposit | electronic transfer of money directly from a payer's account into a recipient's bank account, bypassing physical checks |
| earned income | money received as payment for work or personal services performed |
| employee | a person employed for wages or salary, especially at nonexecutive level. |
| employer | a person or organization that employs people. |
| exemptions | provision that grants an individual, organization, or specific type of income a waiver or relief from a financial liability or requirement imposed by a governing authority, most commonly taxes, purpose is to reduce the money owed |
| federal income tax | mandatory payment to the U.S. government |
| FICA (Federal Insurance Contributions Act) | mandates a federal payroll tax used to fund the U.S. social insurance programs of Social Security and Medicare |
| fringe benefits | non-wage benefits, such as health insurance, life insurance, and retirement plans, that employers provide to employees in addition to their regular pay. |
| gross income | total amount of money an individual or business receives from all sources before any taxes, deductions, or expenses are taken out |
| hourly wage | the amount of money an employee earns for each hour they work. |
| income tax | mandatory payment or levy imposed by a government on the earnings, profits, or income of individuals and businesses |
| Medicare tax | mandatory U.S. federal payroll tax used to fund the Medicare national health insurance program, which primarily covers individuals aged 65 and older, as well as certain younger people with disabilities |
| net income | company's or individual's total earnings after all expenses, deductions, and taxes have been subtracted from revenue |
| overtime pay | the extra compensation paid to employees for hours worked beyond a standard workweek, typically one and a half times their regular rate of pay for hours over 40 in a week |
| profit sharing | a system where an employer distributes a portion of the company's profits to its employees in addition to their regular wages |
| 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 | a performance-based payment for completing a task, usually selling goods or services |
| social security tax | mandatory U.S. federal payroll tax on earned income that funds the Old-Age, Survivors, and Disability Insurance (OASDI) program, which provides retirement, disability, and survivor benefits to qualifying individuals and their families |
| tax deduction | an expense that a taxpayer can subtract from their total (gross) income to arrive at their taxable income. |
| tips (Treasury Inflation-Protected Securities) | a type of U.S. government bond designed to protect investors from inflation. |
| W2 form | an essential financial document that employers use to report an employee's annual wages and the amount of federal, state, and local taxes withheld from their paychecks |
| W4 form | a federal tax document used by employees to inform their employer of their tax situation. The employer then uses this information to determine the correct amount of federal income tax to withhold from the employee's paychecks. |
| withholding | the practice of deducting a portion of a payment (such as wages, interest, or dividends) and sending it directly to the government as a prepayment of taxes owed by the recipient. |
Created by:
mazzarella26