4. Taxes Flashcards
Income tax
A tax on people’s earnings
Sales tax
A tax on a sale of merchandise or services.
Excise tax
Consumer tax on a specific kind of merchandise, such as tobacco.
Payroll tax
a tax that removes money directly from workers’ paychecks
Property tax
tax on tangible and intangible possessions such as real estate, buildings, furniture, stocks, bonds, and bank accounts.
Main types of property tax
- Real Estate Tax
2. Personal Property Tax
Example of real estate tax
Tax on Houses, Lands.
Example of personal property tax
Tax on Cars, Boats.
Estate tax
A tax on the estate, or total value of the money and property, of a person who has died.
Inheritance tax
This is a tax one would pay on their parents or grandparents’ money after they die
Gift tax
a tax on money or property that one living person gives to another.
Public goods
Goods and services, provided by the government, that provide benefits to more than one person at a time (non-excludable), and their use cannot be restricted to only those people who have paid to use them (non-rival consumption)
Gross pay
The total salary before any taxes and other withholdings are deducted from the paycheck.
Net pay
The income that an employee would receive after the possible deductions have been made.
W-4 Form
A federal income tax document that instructs an employer about how much money to withhold from an employee’s paycheck for tax purposes.
W-2 Form
A federal income tax document that employers complete and send to their employees and to the Internal Revenue Service at the end of a year; shows employee compensation and taxes withheld.
Medical Reimbursement
Deductions made from gross pay to fund accounts that allow employees to use “pre-tax” dollars to pay for certain medical expenses like co-pays and pharmaceuticals
Childcare Reimbursement
Deductions from gross pay to fund accounts to help employees pay for childcare.
Tax deductions
are subtracted from income on a tax form, to arrive at taxable income.
Tax credits
are subtracted from the tax owed, directly reducing the amount of tax payable.
Meals tax
Taxes that are generally apply to purchases of prepared food that are consumed in a restaurant or similar establishment, or taken “to go” for later consumption.
Lodging tax
A tax that is charged in most of the United States to travelers when they rent accommodations in a hotel, inn, tourist home or house, motel, or other lodging, generally unless the stay is for a period of 30 days or more.
Estate
All of the valuable things an individual owns, such as real estate, art collections, collectibles, antiques, jewelry, investments, and life insurance.
Estate planning
The collection of preparation tasks that serve to manage an individual’s asset base in the event of their incapacitation or death, including the bequest of assets to heirs and the settlement of estate taxes.