Taxes Flashcards
The total amount of money you have made on a paycheck before any payroll deductions.
Gross pay
The total amount of money you have made on a paycheck after any payroll deductions.
Net Pay
Form that employers send their employees at the end of the year that contains information regarding earnings that are needed to file for tax returns.
W-2 Form
Form that employees give to employers that indicates how much of an employees paycheck is deducted for federal income tax.
W-4 Form
A tax on wages, salaries, AND income from savings accounts, stocks, bonds, and rent.
Federal Income Tax
How much is deducted from a taxpayers paycheck for federal income tax?
Depends on how much they make per year which determines what tax bracket they are in.
A tax that funds programs that aid retired or disabled individuals.
Social Security Tax
How much is deducted from a taxpayers paycheck for social security tax?
6.2%
A tax that goes to aiding retired individuals with their hospital and medical expenses.
Medicare Tax
How much is deducted from a taxpayers paycheck for medicare tax?
1.45%
What is a tax that takes the same percentage of income from all income groups?
Proportional Tax
What is an examples of a proportional tax?
Medicare Tax
What is a tax that takes a larger percent of income from higher income groups than from lower ones?
Progressive Tax
What is an example of a progressive tax?
Federal Income Tax
What is a tax that takes a larger percent of income from lower income groups than from higher ones?
Regressive Tax
What are two examples of a regressive tax?
Sales Tax
Social Security Tax
Why is social security tax considered a regressive tax if a percentage is taken out of all paychecks?
It as a cap on how much is contributed.
Maximum contribution is $7,347 ($118,500/year)
What is a tax paid on all goods and services at the time of purchase?
Sales Tax
Sales tax is the largest source of revenue for which level of government? (local/state/federal)
State Government
A tax on a good before it is sold to consumers (i.e. gasoline, liquor)
Excise Tax
A tax levied by local government based on the value of the property you own.
Property Tax
Property tax is the largest source of revenue for which level of government? (local/state/federal)
Local Government
A tax on the transfer of property when a person dies.
Estate Tax
A tax on donations of money or wealth and is paid by the person whom makes a gift.
Gift tax
What is the maximum amount a person can gift without also paying a gift tax?
$14,000
What forms of gifts are not taxable by the gift tax?
Tuition, medical expenses, gifts to spouse, 529 plans
What are the three groups eligible for Social Security benefits?
Retired workers Disabled workers (and families) widows, widowers
What age is considered retired?
65/66
What is privatization?
Instead of the government setting money aside for retirement, the taxpayer would set it aside.
