Chapters 4-7 Flashcards
Hourly pay
When you receive the amount for each hour you work
Salary
When you are under contract to make a certain amount of money per year no matter how many hours of work you put in
Deductions
Amounts subtracted from your gross pay
Ex) social security tax, federal income tax, union dues, insurance
Net pay
“The take home”
The amount you take home after all deductions have been made from your pay
Benefits include:
Health insurance, retirement, pension plans, paid sick time, vacation
If you work for yourself, you must:
File estimated tax returns quarterly, with payments
Helps businesses so they pay smaller increments vs one large sum
Flextime
Employees get to choose working hours
Compressed work week
Four 10 hour days, 3 days off
Job sharing
Two people share one full time job. They split salary and benefits
Job rotation
Employers are trained in different areas and rotate through the positions. This helps you use different schools and prevents boredom
Four functions of labor unions
- Recruit new members
- Engage in collective bargaining
- Support political candidates who are favorable to the union
- Provide support services to members by keeping them employed, negotiating wages, and working conditions
Collective bargaining is the process of negotiating the terms of employment for union members, terms of agreement of contracts, wages, benefits, overtime
Unions protect older employees. It ensures that newer employees are laid off first, transferred or promoted if warranted
Progressive taxes
Take a larger share of income as the income grows
Ex) income tax
Regressive tax
Takes a larger percentage from low income people than from high income people
Ex) sales tax
Proportional tax
Flat tax
Stays the same regardless of income
Ex) house/ property tax
IRS
Internal Revenue Service
Agency of the department of treasury
IRS functions
Collect income taxes and enforce tax laws
Helps people by giving out tax information to anyone who needs it
How many tax brackets and % ranges
6 brackets
10%-35%
First step in filing taxes
Decide your filing status
Exemptions
The amount that you may subtract from your income for each person who depends on you. You can exempt yourself
Gross income
All the taxable income you receive
Wages, tips, salaries, interest, dividends, unemployment collected, alimony, workers comp
Where are tips found when filing taxes
W-2 form
Adjusted gross income
The taxable amount once all of the adjustments have been made
Itemized list
In order to get tax benefits from your deductions, you must come up with this
Medical and dental expenses, property tax, mortgages, gifts to charity, property damage, theft, and moving expenses
Gross income equation
Adjustments/ adjusted gross income
Adjusted gross income equation
Exemptions/ taxable income
Tax credit
An amount that is subtracted directly from the amount that you owe in taxes
College tuition, child care, lower wage earners
Deductions
Subtracted from the gross income
Tax credit
Deducted from the amount of taxes that you owe
Gross pay
The total amount earned before any deductions are taken out
