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Income and taxes
| Term | Definition |
|---|---|
| BiWeekly | done, or occurring every two weeks or twice a week |
| Dependent | Requiring someone or something for financial, emotional, or other support |
| Direct deposit | A electronic transfer of a payment directly from the account of the payer to the recipients account |
| Earned income | Compensation received for personal services performed or active work |
| Employee | A person employed for wages or salary, even at a non executive level |
| Employer | A person that employs people |
| Exemptions | The process of freeing or state of being free from an obligation or liability imposed on others |
| FICA | Federal Insurance Contributions Act is law requiring a mandatory payroll tax to find the social security and Medicare programs |
| Fringe Benefits | Non-monetary compensation an employee receives in addition to their salary |
| Gross Income | The total amount of money an individual or business earns from all sources before any taxes |
| Hourly wage | Amount of money an employee for each hour they work |
| Income tax | Tax levied by government directly on income, especially an Ann tax on personal income |
| Medicare tax | A mandatory federal payroll tax that funds the Medicare health insurance program for older individuals and certain younger people with disabilities |
| Net income | Net income, is the money a person or business has left after subtracting all expenses, taxes, and deductions from total revenue, representing the "bottom line" or true profitability for a specific period. |
| Overtime pay | extra compensation for work performed beyond an employee's standard hours |
| 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 | a performance-based payment, usually a percentage or flat fee, given to employees for selling goods or services, acting as an incentive to boost productivity by directly linking income to sales success |
| Social security tax | Social Security tax is a mandatory U.S. federal payroll tax funding retirement, disability, and survivor benefits, split between employees (6.2%) and employers (6.2%) for a total of 12.4% on earnings up to an annual wage base limit |
| Tax deduction | A tax deduction is an expense or amount you subtract from your income, lowering your taxable income and, consequently, your overall tax bill |
| 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 W-2 form is an essential IRS document employers provide to employees by January 31st, detailing their annual earnings, tips, and taxes withheld for the previous year, crucial for filing accurate income tax returns and verifying income. |
| W4 Form | A W-4 form, or Employee's Withholding Certificate, is an IRS form you fill out for your employer to tell them how much federal income tax to withhold from your paycheck. |
| Withholding | refusal to give something that is due or desired. |
Created by:
Hzwierzchowski28
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