Personal Finance Chapter 12 Vocabulary

Question 1

The total amount of taxes that you owe.

Answer 1

Tax Liability

Question 2

Tax owed on wages, salaries, and self-employed earnings

Answer 2

Income Tax

Question 3

Income that is not subject to taxes.

Answer 3

Exclusion

Question 4

Your Adjusted Gross Income (AGI) minus any allowable tax deductions and exemptions.

Answer 4

Taxable Income

Question 5

The form you fill out to file your taxes.

Answer 5

1040

Question 6

An amount of money set by the IRS that is not taxed.

Answer 6

Standard Deduction

Question 7

An expense that you can subtract from your AGI (such as home mortgage interest, medical expenses, etc…) to figure your taxable income.

Answer 7

Itemized Deduction

Question 8

An amount of money that can be subtracted directly from the taxes that you owe.

Answer 8

Tax Credit

Question 9

An adjustment to the tax withheld from your paycheck, based on your marital status, job status, or dependents.

Answer 9

Allowance

Question 10

A detailed examination of your tax return by the IRS.

Answer 10

Tax Audit