Prelim 1 Flashcards
Debt Ratio
Liabilities/Net Worth
Current Ratio
Liquid Assets/Current Liabilities
Liquidity ratio
Liquid Assets/(Expenses - Income Taxes)
Debt Payment ratio
(Mortgage pmt + credit card pmt)/ (Income - taxes)
Savings Ratio
Net Cash / (Income - Taxes)
Mortgage Debt Ratio
(Mortgage + real estate taxes + home owners insurance) / Income
Career Opportunities are affected by
- High interest rates
- Price increases
- Decreased demand for goods and services
What are the main sources of networking
- Community organizations
- Professional Organizations
- Business contacts
What are major employment benefits
Retirement plans, Health insurance, Life Insurance, Long-term disability, Dental insurance, Subsidized day-care facility, Vision and hearing plans,
Progressive tax
Imposes higher rates on high income taxpayers
Regressive tax
-Disproportionate burden on low income people
-Any tax that applies the same to all people is regressive since it takes a bigger bite out of lower income families’ disposable income
(Examples are sales tax, FICA tax, excise tax)
What are the four types of taxes
- taxes on purchases
- taxes on property
- taxes on wealth
- taxes on earnings
How do you calculate total tax liability
- > Total Income- Minus Adjustments =Adjusted Gross Income
- > Adjusted Gross Income- Minus Exemptions per dependent- Standard or Itemized Deductions =Taxable Income
Calculate Tax from Tax Tables - Credits = Tax Liability
Tax form: how much tax credit do you receive for each child?
1,000
Tax form: How do you calculate adjusted gross income?
Total income - adjustments ( IRA or Alimony)
Tax form: What percentage of medical expenses are deducted
Medical expenses - 10% interest of adjusted gross income.
Tax forms: What is the exemption for married couples?
$12,600
What is the exemption for a single person
$6,200
How is Social Security Tax calculated?
6.2% of income up to $127,200
How is Medicare tax calculated?
1.45% of income (no limit)
What is FICA made up of
Social Security and Medicare
Tax liability (flow)
Gross income –> (+/-)adjusted income –> (-) exemptions for married or single –> (-) deduction/schedule A –> taxable income * (what is the tax based on the tax sheet) –> actual tax amount –> (-) tax credits –> (-)tax withheld =
Total taxes
Itemized deductions
Medical, NYS IT, R/E taxes, Interest (any secured by home), Charity, Misc (2% adjusted gross income limit)
