ch 6 Flashcards
Net pay
wages that remain after taxes withheld
Personal income tax
A tax levied on the financial income of an individual
Payroll tax
Taxes withheld from paychecks and sent to the government by employees
sales tax
tax collected by merchant when a purchase made
Social Security
Funded my payroll taxes and provides payment to retirees and disabled people
Standard deduction
A standard or fixed amount individuals are allowed to deduct from there Adjustable gross income to reduce tax tax liability
tax
Money collected by a government from its citizens to operate the government
Tax return
Our report submitted to the IRS that includes all information relative to one’s income tax
Adjustable gross income
total income minus certain allowable amounts, such as retirement accounts, money, payments, and interest
Capital gains
Taxable income that occurs when an asset is sold for more than originally costs
Gross income
The total amount of a persons income
IRS
A branch of the treasury department of the United States that carries out the federal tax system
Itemized deduction
A specific expense that under tax law can be deducted from income to reduce the amount of income, subject tax
Medicare
A federal health insurance program in the United States for people 65 or older with disabilities
