Chapter 7 Flashcards
A person reported on a taxpayers income tax form that a taxpayer supports financially
Dependent
Information included on tax forms that lowers taxes; include dependents as well as the taxpayer
Exemption
A tax that is the same percentage of rate for everyone, such as sales tax
Flat Tax
A form that is filled out by a new employee that gives directions to the government on how much money in taxes to deduct from an employees pay
Form w-4
A form used to report the withholding data; a Wage and Tax Statement given to employees to compute federal, state, and local income taxes
Form W-2
A form used to report other income made from interest on bank accounts, stocks, and royalties
Form 1099
A tax form used by people that have other types of income such as royalties, alimony, or prizes, also called log form
Form 1040
The total pay, which is the sum of an employee’s hourly pay and overtime pay
Gross pay
Special status for unmarried taxpayers who support other people besides themselves and their children
Head of household
Taxes that are based on the amount of taxable income that you earn
Income Tax
Government agency that collects federal taxes
IRS
When deductions are listed on an income tax form
Itemize
Filing status for married taxpayers who chose to fill out separate income tax returns
Married filing jointly
Filing status for married taxpayers that chose to fill out one income tax return together
Married filing seperatly
A form of payment to employees for their work
Paycheck
A tax that increases as income increases; the percentage or rate increases
Progressive tax system
Taxes that are based on the assessed value of property owned
Property tax
A percentage paid to the government of sales on products or services
Sales tax
Filing status for unmarried taxpayers that is indicated on tax forms which determines the tax rate paid
Single
An allowable reduction on income tax forms that is based on the filing status
Standard deduction
The amount of money a worker takes home after deductions
Take home pay
The amount of money a person must pay to the government to benefit from government services
Tax
Earnings that are taxable
Taxable income
When a taxpayer uses a tax rule to lower the amount of tax due
Tax avoidance
Where each line of the tax schedule has an increasing percent based on increasing income
Tax bracket
An amount subtracted from the income tax owed
Tax credit
When money is placed in a qualified retirement account, the taxes are deferred until the taxpayer makes a withdrawal from the account until after retirement
Tax deferred contribution
When a taxpayer lies about information on a tax return form in an attempt to avoid paying taxes
Tax evasion
