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epf > test unit 8 > Flashcards

test unit 8 Flashcards

1
Q

beneficiary

A

person who is named to receive a portion of someone’s estate

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2
Q

estate

A

all the property and assets owned by an individual and/or group

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3
Q

estate tax

A

federal tax collected on the total value of a person’s property and assets at the time of his or her death

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4
Q

excise taxes

A

state or federal tax placed on non-essential, luxury consumer goods

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5
Q

gift tax

A

a tax imposed on transfers of property (money or other assets) during a person’s life

gifts up to 15k per person per year are not subject to the tax

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6
Q

income tax

A

tax on wages, salaries, and self-employed earnings

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7
Q

inheritance tax

A

a tax, collected in some states, on property left by a deceased person

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8
Q

internal revenue service (irs)

A

government agency that collects taxes for the U.S. government

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9
Q

intestate

A

status of not having a will

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10
Q

payroll taxes

A

taxes deducted from the wage earner’s gross pay by the employer

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11
Q

probate

A

legal procedure of proving that a will is valid or invalid

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12
Q

progressive tax

A

the tax rate rises as the amount of taxable income rises

ex: income tax

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13
Q

property tax

A

taxes paid by people who own items such as homes, land, and vehicles to the city and/or country where the property is located

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14
Q

proportional tax

A

levies the same percentage of tax at all income levels

a “flat” tax

ex: property tax

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15
Q

regressive tax

A

imposes a higher percentage of tax on people with lower incomes

ex: sales tax

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16
Q

sales taxes

A

state and local taxes imposed on retail goods & services (products) and are based on a set percentage of retail cost

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17
Q

tax credit

A

amount of money that can be subtracted directly from taxes owed

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18
Q

tax deduction

A

expense subtracted from your adjusted gross income to figure taxable income

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19
Q

taxes

A

required payments of money to governments used to provide public goods and services

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20
Q

will

A

legal declaration (or statement) of a person’s wishes regarding disposal of his or her estate after death

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21
Q

people who are entitled to receive property from the will are called…

A

heirs

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22
Q

if someone dies without a will, who will guide the process?

A

a judge

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23
Q

who do you appoint in your will if you have minor children?

A

a guardian, this person is legally responsible for the care of your children in the event of your death

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24
Q

estate planning can help increase the amount of taxes due on any asset

A

false

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25
Q

you can give presents to benefit your heirs while you are alive to reduce the taxable amount of your estate

A

true

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26
Q

an estate tax is a type of excise tax that is levied on the value of an asset an heir receives from the estate of the deceased

A

true

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27
Q

the marital deduction means an asset is not taxed when you leave the asset to your spouse in your will

A

true

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28
Q

inheritance tax does not need to be paid on bequests received by a beneficiary named in a will

A

true

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29
Q

in estate planning, when someone gives a gift of any value to someone else, he or she must pay a gift tax

A

false

30
Q

if you make a charitable donation to nonprofit organizations in your will, your heirs will pay taxes on the value of the donations

A

false

31
Q

there are no types of taxes that can have an impact on your estate after your death

A

false

32
Q

another name for will is an advanced medical directive

A

false asf…

33
Q

bankruptcy

A

legal process in which some or all of the assets of a debtor are distributed among creditors because the debtor is unable to pay his or her debts

34
Q

borrower

A

a person or organization that is receiving money

35
Q

certificate of deposit (cd)

A

a savings alternative in which money is left on deposit for a stated period of time to earn a specific rate of return

36
Q

closed-end credit

A

credit as a one-time loan that is paid back over a specified period of time in payments of equal amounts

37
Q

collateral

A

a form of security that helps guarantee that the creditor will be repaid

38
Q

commercial banks

A

a for-profit institution that offers a full range of financial services, including, checking, savings, and lending

39
Q

credit

A

an arrangement to receive cash, goods, or services now and pay for them in the future

40
Q

credit bureau

A

an agency that collections information on how promptly people and businesses pay their bills

ex: experian, trans union, equifax

41
Q

credit limit

A

the maximum amount of a credit card company will allow someone to borrow on a single card

42
Q

credit union

A

a nonprofit financial institution that is owned by its member and organized for their benefit

43
Q

debit card

A

a cash card that allows one to withdraw money or pay for purchases with a checking or savings account

44
Q

interest rate

A

the price that is paid for the use of another’s money

45
Q

money market accounts

A

a savings account that requires a minimum balance and earns interest that varies from month to month

46
Q

principal

A

the amount of money borrowed or the amount still owned on a loan, separate from interest

47
Q

savings account

A

a bank account that earns interest

48
Q

all wages, salaries, and tips

A

money earned at jobs from january 1st through december 31st of the previous calendar year

49
Q

interest income

A

earned from bank accounts and bonds as stated on form 1099-int

50
Q

dividend income

A

money earned from stocks as stated on form 1099-div

51
Q

unemployment compensation

A

income earned through unemployment insurance after losing a job, 1099-g

52
Q

social security benefits

A

payments made to dependents, stated on ssa-1099

53
Q

alimony

A

money paid to former spouse after a divorce

54
Q

w-2 form

A

summarizes annual wages, amount of taxes withheld, 401k and 403b payments

55
Q

what happens if you are a tax evader?

A

government advises them about money owed including interest when caught, may face jail time, can seize their assets and auction them for money if they do not have the money owed

56
Q

how does the government know who has not paid the correct amount?

A

irs checks returns for accuracy, protects tax revenue, and performs tax audits

57
Q

tax audit

A

a detailed examination of a person’s tax return by the irs

58
Q

fairness of taxes

A

is judged by the benefits received and the ability to pay

59
Q

benefit principle of taxation

A

those who receive (benefit) from the government service should pay more taxes to support the service

ex: public college tuition

60
Q

ability to pay principle of taxation

A

those who earn higher incomes should pay more taxes

ex : taxes on luxury goods

61
Q

executor

A

a person who is willing to distribute your estate

62
Q

guardian

A

a person who accepts responsibility of caring for minor children

63
Q

living will

A

a written statement detailing a person’s desires regarding their medical treatment in circumstances in which they are no longer able to express informed consent

64
Q

power of attorney

A

a document used to appoint someone to make decisions on your behalf

65
Q

trust

A

an arrangement in which a designated person manages assets for the benefit of someone else

66
Q

what would parents leave in their will?

A

important assets like heirlooms, vehicles, even bank accounts

67
Q

a gas tax paid by all drivers is fair according to the criterion of ability to pay

A

true

68
Q

because property taxes usually support schools, people with no children do not have to pay them

A

false

69
Q

our federal income tax is based on the ability to pay principle

A

true

70
Q

in the United States, people with low incomes are allowed no benefits

A

false

71
Q

all people benefit equally from government services

A

false

epf (6 decks)

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