Taxes Unit Flashcards
Payroll Deductions
Amounts taken out of an employee’s paycheck each pay period.
Examples: federal, state, local taxes, insurance, job related expenses
How is W-2 employment paid?
employer withholds and sends taxes to the gov on your behalf
How is self-emloyment tax paid?
You make quaterly payments to the IRS based on what you expect to earn that year.
How are lottery or gambling winnings paid?
Payer withholds some money for taxes (if you won more than a certain amount)
How are investments and retirement income paid?
You can CHOOSE to have taxes withheld or make estimated payments.
Payroll Tax
Taxes employees and employers pay on wages, tips, and salaries.
Employers: taxes are withheld for their pay and the employer pays to the government
Progressive Tax
Upper income families pay a larger share of their incomes than lower incomes.
Regressive Tax
Poor and middle income to pay a larger share in their incomes in taxes than the rich
Proportional Tax
Same percentage of income from everyone, regardless of how little or much they own
Standard Deduction
a certain figure set by the government that can be subtracted from your taxable income
- less effort than itemixing
Itemized Deductions
expenses allowed by the IRS that can decrease taxable income
- more time needed on tax report due to other forms
Pay Stub
Details your earnings, voluntary deductions, and any pieces of important information.
Income tax
Money the government collects from people based on how much they earned or recieved during the year.
Salary Pay
pay employees the SAME amount each pay period regardless of how much they work
Wage Pay
an hourly rate you pay employees based on how much time they put in during a pay period
