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Consumer Economics > Taxes > Flashcards

Taxes Flashcards

1
Q

Medicare

A

1.45% gross income

Pays for health care of those 65 and older

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2
Q

Social securities

A
  1. 2% gross income
    - Both employe and employer pay social security tax
    - No longer deducted after you reach 118,500
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3
Q

State income tax uses how much gross income?

A

3.75% Gross income

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4
Q

Federal tax income is determined by what?

A

Determined by how you complete the W-4 form

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5
Q

Where does the federal gov get its money?

A

Income taxes
Social security taxes
Medicare taxes

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6
Q

Where does the state gov get its money?

A

Income taxes and Sales taxes

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7
Q

Where does the local gov. get it’s money?

A

Sales taxes and Property taxes

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8
Q

What does the federal gov put its money into?

A

Health care
Social security/Pensions
Defense

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9
Q

What does the state gov do with its money?

A

Education
Highways
Public assistance

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10
Q

Local gov uses its money to fund…?

A

Education
Roadways
Public assistance

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11
Q

Which gov funds each of these?

Defense, roadways, and education?

A

Federal, local, and state gov

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12
Q

Proportional tax (flat tax) is what kind of tax?

A

State income tax

Same rate for all people

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13
Q

Regressive tax

A

Taxes that hurt lower income individuals more than wealthier ones
(It’s a Sales tax and property tax)

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14
Q

Progressive tax

A

The more you earn, the more you pay

It’s a Federal income tax

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15
Q

Tax liability

A

The tax you owe and are responsible for paying

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16
Q

Exemptions do what to your income?

A

Reduces it by a specific sum for each person you support (including yourself)

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17
Q

Filing status does what?

A

Determines which tax form you use, and how much tax you must pay

18
Q

Married filing jointly definition

A

Married the last day of the year, are combining incomes and tax liabilities

19
Q

Tax credit

A

A reduction in the amount of your tax liabilities

20
Q

Hi

A

Hi

21
Q

Allowance certificate

A

Tells employers how much federal tax to withhold from your check

You fill out this form at the start of every job

22
Q

Wages and tax statement

A

List wages, tips, federal income tax, social security, and Medicare contributions for the year
(receive one for each job from that year)

23
Q

1040-“long form”

A

Can be used by anyone
Must be used if taxable income is over $100,000
Self employment income
Have Dependents

24
Q

Social security provide what for whom?

A

Monetary benefits for retired, disabled, or survivors

25
Q

What type of tax is a social security tax?

A

Proportional

everyone gets same % of income

26
Q

FICA stands for what?

A

Federal insurance contributions act

social security + Medicare

27
Q

Social security’s biggest problem

A

Not enough money to pay its benefits

28
Q

The significance of the numbers addicted as a persons social security #

XXX - XX - XXXX

A

Area - #group - #serial

Area-persons state of residence
Group-no significance

29
Q

Where does the fed gov get most of its money?

The Illinois state gov?

A

Federal income tax

State income tax

30
Q

W-2 form

A

Sent by employer.

Lists all wages, tips received, and income tax paid through the year

31
Q

W-4 form

A

Filled out by employe, so the employer can withhold the correct amount of federal income tax from their paychecks

32
Q

When must your income taxes be filled out?

A

April 15

33
Q

1040, 1040A, and 1040EZ all do what?

A

Help you calculate how much tax you owe

34
Q

INT-1099

A

Bank tells you and the IRS how much interest you receive

35
Q

1040A

A

Can be used by anyone
Dependents, Less than 100,000
IRA contributions, over 1,500
No itemized deductions

36
Q

1040 EZ

A

Single or married filing jointly
No dependents
Under 100,000 and 1,500

37
Q

Filing which number on the w-4 will deduct the most money from your paycheck?

A

0

38
Q

Which form would you complete if you used these?
Taxable income over 100,000
Itemized deduction (mortgage, student loan interest, etc…)

A

1040

39
Q

Tax deduction vs Tax credit

A

Tax Deduction: Reduces taxable income

Tax Credit: Reduces tax liability

42
Q

(blank) reduces your taxable income by using a set dollar amount put in place by the IRS

A

Standard deduction

Consumer Economics (7 decks)

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