# TAXES Flashcards
7 big categories of taxes
Tax => to fund & to create
finance charges levied or imposed upon a taxpayer or legal entity
- Income tax - tax on income
- Property tax - tax on property
- Inheritance tax - tax on inheritance
- Sales tax - tax on sales
- Excise tax - tax on bad products
- Tariff - tax on international trade
- Payroll tax - tax on salary
a finance charge
the total cost including interest that you must pay for borrowing money in the form of a loan or with a credit card
levy - v
to officially ask for an amount of money, such as a tax, for a government or organization
imposed upon
to introduce a new law, tax, rule, or punishment
a taxpayer
a person who pays tax
a legal entity
a company or organization that has legal rights and responsibilities, for example the right to make contracts and the responsibility to pay debts
(to fund) public expenditures
is spending made by the government of a country on collective needs and wants such as pension, provisions (such as education, healthcare and housing), security, infrastructure, etc
(to create) social welfare
services provided by the government or private organizations to help poor, ill, or old people
- Income tax (tax on income)
the BIGgest source of Tax revenue for the GV
- Property tax (tax on property like real
estate)
be collected by the Municipal GV. (be similar to be A rent expense)
- Inheritance tax (tax on inheritance)
have received from someone who has died
- Sales tax (tax on an exchange) (like VAT in VN)
The customers will bear the tax burden
- Excise tax (tax on bad products like
tobacco, alcohol, etc, carbon tax)
to limit the activity of
companies producing these kinds of products
carbon tax (tax on the consumption of fuels are harmful to the environment)
com. emit CO2 a lot have to pay carbon tax
- Tariff (tax on import and export)
discourage international trade => protect domestic corporations from outsiders who can compete at cheaper prices
- Payroll tax (imposed on employers and employees)
to fund social security and unemployment insurance
Tax policies
used by the government to manipulate the our behavior => equalize
the rich and poor
- a great incentive tool
if donate to charity, get a tax credit => reduces tax payable => make donation cheaper.
dependants
peo in the family who live off of your income
remit to (the GV)
submit the payments to
calculate
(Total income - deductions) x tax rate - tax credits.
taxable income
the amount of income used to calculate how much tax an individual or a company owes to the government
a paycheck
the amount of money a person earns
a payroll staff
a payroll manager or supervisor and assist with coding, posting, and auditing payroll reports
tax agency
an organization with official responsibility for collecting taxes
tax return
like free money
a form in which we declare our income, deductions and credits to
calculate the tax
INCOME
The most common type is employment income or
salary or wages
self-employed => Self employment income
run their own business or they work for themselves
=> money earn Self employment income => earn from selling material things
professional income
Another type of self-employment income
=> earn from professional activities like consulting, accounting, legal or medical services
rental income
rent their real estates and collect rents
every month.
investment income - comprises Dividends and Interests
invests money in stocks and bonds and earns Dividends ~ are paid to bondholders Interests ~ are paid to bondholders
Capital gains => are taxed at the smallest rate
the gain of property
after you sell your it (Sold $5 - buy $3 = gain)
pension income
money you receive from the GV when you get old enough.
DEDUCTIONS
=> reduce your
taxable income
to reduce your income on the tax return to
pay as less tax as possible.
like expenses
* expenses
that are paid for the purposes of earning income to claim a deduction
union or professional dues
@ make to the union based on their working status.
@ Membership fees paid to maintain a professional status recognized by law
CREDITS
=> reduce your tax obligation
to encourage good bahaviors of the society
=> makes donation cheaper
Tax avoidance
Legal
to minimize or delay the tax liabilities using legal
ways.
Way: to maximize
the amount of tax deductions and tax credits.
used by accountants and tax professionals to reduce taxes for their clients
Tax evasion
illegal, a crime
intentionally avoids paying taxes owed
Places to evade taxes
=> tax havens are jurisdictions
=> levy no or only small taxes
no share inf about the foreign tax payers to protect them
