Chapter 21 Flashcards
the total amount of taxes owed
tax liabilty
A federal tax collected on the value of a person’s property at the time of his or her death
estate tax
A state tax collected on the property left by a person to his or her heir(s) in a will
inheritance tax
A tax of wages, salaries, and self-employed earnings
income tax
A form, such as 1040 or 1040EZ, on which a taxpayer reports how much money he or she received from work and other sources and the exact taxes that are owed
income tax return
Income that is not subject to taxes
exclusion
Gross income after calculating certain reductions to income
adjusted gross income
Adjusted gross income minus any allowable tax deductions and exemptions
taxable income
An expense that can be subtracted from adjusted gross income to figure taxable income
tax deduction
An amount of money set by the IRS that is not taxed
standard deduction
A specific expense, such as a medical expense, that can be deducted from th adjusted gross income
iteamized deduction
Deduction from adjusted gross income for the taxpayer, the spouse, and qualified dependents
exemption
An amount of money that can be subtracted directly from taxes you owe
tax credit
An adjustment to the tax withheld from your paycheck, based on your marital status and whether you have dependents
allowance
an extended dead line for filing an income tax return
extension
a detailed examination of a tax return by the IRS
tax audit
a tax on specific good and services such as gasoline, air travel, and telephone service collected by federal and state governments
excise tax
someone you support financially, as a child
dependant
lack of attention
negligence
collects
levies
an explination
clarification
placing in danger
jeapordizing
The tax a person pays when he or she buys a music CD is…
A. Sales Tax
B. Excise Tax
C. Estate Tax
D. Gift Tax
sales tax
An example of an inheritance tax is the money collected on…
A. Pizza order
B. Cigarettes and gasoline
C. Decreases personal money
D. Property left in a will
property left in a will
The federal government’s leading source of revenue is…
A. Property taxes
B. Sales taxes
C. Income taxes
D. Social Security Taxes
income taxes
In which category do tips belong?
A. Earned income
B. Dividend income
C. Interest income
D. Amount of taxes owed
earned income
An exemption is subtracted from a person…
A. Gross income
B. Adjusted gross income
C. Taxable income
D. Amount of taxes owed
adjusted gross income
The money a person receives from the government when he or she pays too much in taxes is called a tax…
A. Liability
B. Refund
C. Credit
D. Exclusion
refund
A W-4 form determines the amount an employee will…
A. Make in estimated payments
B. Pay in taxes
C. Receive in Social Security
D. Have withheld
have withheld
If a person cannot file his or her federal tax return by April 15, he or she must file a…
A. Form 4868
B. Form 1040EZ
C. W-2 form
D. Form 1099-INT
form 4868
Of the following steps, which is the last a person performs when preparing his or her tax return?
A. Entering total wages
B. Subtracting deductions from adjusted gross income
C. Subtracting tax owed from tax withheld
D. Claiming an earned income tax credit
Subtracting tax owed from tax withheld
Which amounts are tax-deferred?
A. Interest paid on mortgage loans
B. Real estate taxes
C. Interest made on municipal bonds
D. Investments in IRAs
investments in IRAs
An example of a(n) ______ is interest earned on municipal bonds which is often exempt from federal income tax.
A child is an example of a(n) ______ or someone you support financially.
dependant
By filling for 4868 by April 15th you can receive a four-month ______ for filing an income tax return.
extension
