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Intro to Business > midterm - chapter 16 > Flashcards

midterm - chapter 16 Flashcards

1
Q

tax used to pay fro healthcare for age 65+

A

medicare tax

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2
Q

tax based on the value of items received from a deceased person

A

inheritance tax

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3
Q

tax on personal income; a major source of revenue for federal and state governments

A

income tax

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4
Q

the difference between a person’s assets and liabilities

assets - liabilities = _____

A

net worth

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5
Q

Why do we pay taxes?

A

to help finance government projects like roads, schools, libraries, police department, etc

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6
Q

form filled out by the employee so that the employer will withhold the correct federal income tax fromt he employee’s paycheck

A

W-4 form

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7
Q

payments made by self-employed people and paid directly to the government quarterly

A

estimated payments

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8
Q

a financial statement that reports net wages and other income along with spending for a period, such as for a month

A

cash flow statement

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9
Q

actual spending is less than budgeted amount

A

budget surplus - spent less than budgeted so have extra money left over

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10
Q

What type of taxes are in ‘taxes on wealth’ category?

A
  • estate tax - based on person’s property at death
  • inheritance tax - based on items received from deceased person
  • gift tax - tax on any property or cash received as a gift
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11
Q

a tax deduction for the taxpayer, a spouse, and each dependent (child)

A

exemption

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12
Q

costs that occur on a regular basis and are for the same amount each time

A

fixed expenses

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13
Q

shows personal assets, personal liabilities and a person’s net worth/owner’s equity

A

personal balance sheet

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14
Q

tax form that reports income and deductions to determine the amount of taxes owed or amount of refund

A

1040 form

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15
Q

tax based on the value of a person’s property at death

A

estate tax

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16
Q

a charge imposed by a government to finance public services

A

tax

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17
Q

your expenditures; money spent on all needs and wants

A

cash outflows

ex. rent/mortgage, food, clothing, utilities, telephone, entertainment, etc

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18
Q

a state or local tax on goods and services that is collected by the seller

A

sales tax

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19
Q

due date to file your federal income tax return

A

april 15

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20
Q

What type of taxes are in ‘taxes on earnings’ category?

A
  • social security tax
  • income tax
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21
Q

What are the 5 characteristics of an effective budget?

A
  1. must be realistic
  2. should be flexible
  3. should be evaluated regularly
  4. must be well planned and clearly communicated
  5. should have a simple format
22
Q

What type of taxes are in ‘taxes on property’ category?

A
  • real estate property tax - tax on land and buildings, helps pay for schools
  • personal property tax - tax on boats, cars and trucks
23
Q

costs that differ each time and may not be as easy to estimate

A

variable expenses

24
Q

What determines how much a person pays in taxes?

A

is related to where you live, how much money you earn and how you spend and save your money

25
Q

tax based on the value of personal property such as boats, cars and trucks

A

personal property tax

26
Q

examples of personal assets

A
  • money in bank - checking or savings
  • investments
  • furniture
  • clothing
  • automobiles
  • jewelry
  • rare coins
  • etc
27
Q

What are the 6 purposes of a budget?

A
  1. Live within your income
  2. Make wise buying decisions
  3. Avoid credit problems
  4. Plan for financial emergencies
  5. Develop money management skills
  6. Achieve your financial goals
28
Q
  • form provided by the employer to the employee
  • it reports wage and salary info for the employee as well as the amount of federal, state and other taxes withheld fromt he employee’s paycheck
A

W-2 form

29
Q

an amount that reduces your taxable income

A

tax deduction

30
Q

tax based on immovable property - land and structures - that are permanently attached to the ground such as houses, buildings, barns, etc

A

real estate property tax

31
Q

tax on gifts of any kind (property and money) when the value of the gift exceeds a certain dollar amount

A

gift tax

32
Q

amount that reduces taxable income

A

tax deduction

ex. standard deduction or itemized deductions (medical expenses, property taxes, mortgage interest, etc)

33
Q

any difference between actual spending and budgeted amount

A

budget variance

34
Q

What type of taxes are in ‘taxes on purchases’ category?

A
  • sales tax - tax on everything you buy except food and clothing
  • excise tax - imposed on specific goods and services, ex. gas
35
Q

total income - tax deductions = taxable income

taxable income x tax rate = ______

A

final taxes owed

36
Q

a charge imposed by a government to finance public services

A

tax

37
Q
  • the amount on which taxes are calculated
  • Gross Income - Tax Deductions = ______
A

taxable income

38
Q

What are the 8 common budget categories?

A
  1. savings
  2. food
  3. clothing
  4. househoold
  5. transportation
  6. health and personal care
  7. recreation and education
  8. gifts and contributions
39
Q

actual spending is greater than budgeted amount

A

budget deficit - spent more money then you were supposed to

40
Q

US government agency that collects taxes and enforces the internal revenue laws

A

IRS - Internal Revenue Service

41
Q

the day to day financial activities associated with using limited income to satisfy your unlimited needs and wants

A

money management

42
Q

detailed plans for the financial needs of individuals, families and businesses; allows you to meet your personal goals with a system of saving and wise spending

A

budget

43
Q

examples of personal liabilities

A
  • credit card balances
  • car loans
  • personal loans
  • home mortgage
  • etc
44
Q

tax used to finance retirement and disability benefits

A

social security tax

45
Q

What are the 4 major tax categories?

A
  • taxes on purchases
  • taxes on property
  • taxes on wealth
  • taxes on earnings
46
Q

the money you have available to spend as a result of workign or from other income such as interest earned

A

cash inflows

ex. take home pay/net pay, interest income

47
Q

determines the amount of tax a taxpayer is required to pay for a year

A

federal income tax return

48
Q

a tax imposed on specific goods and services; built in to the price

A

excise tax

49
Q

What are the 4 steps in a personal budget process?

A
  1. set financial goals
  2. plan budget categories
  3. maintain financial records
  4. evaluate your budget
50
Q

a ‘pay as you go’ system in whcih an employer deducts income tax from the earnings of workers

A

withholding

Intro to Business (41 decks)

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