Section 12 Flashcards
Tax evasion
NO
Tax exemption - prudent planning to pay your fair taxes, but no more than what is legally owed
YES
Department of treasury
IRS
state
department of revenue
county/city
Who collects taxes
3 types of taxes (most common)
sales, income, property
Only voluntary tax
sales tax
The more you earn the higher % of tax you pay
progressive income tax system
How does the gov. receive income tax payments?
employers take out the tax and pay the gov.
Applied against tax bill
a dollar-for-dollar reduction of the money you owe
tax credit
decreases your taxable income, leading to a slightly lower tax bill
tax deduction
done while your living to anticipate and manage the states of your assets after death/incapacity
estate plan
a statement about what happens after death
will
person who handles the allocation process
executor
gov. steps in and allocates assets for a person who has not done estate planning
legal process of administering the estate of a deceased person resolving all claims and distributing the deceased person’s assets according to the instruction of a will
probate
Benjamin Franklin’s famous quote about the two certainties in life
death and taxes
Date of tax day
April 15
