Unit 2 review: Income and careers Flashcards
tax
Money collected by a
government from its citizens for
the purpose of operating the
government.
payroll taxes
Federal and state
taxes withheld from a person’s
paycheck and sent to the
government by his employer.
tax return
A formal report
to the IRS that contains all the
information relative to a person’s
income taxes for a specific year.
gross income
Total amount of
a person’s income from (almost)
any source.
capital gains
A taxable gain
that occurs when you sell an
asset for more than what you
paid for it.
adjusted gross income
Income calculated by taking
total income and subtracting
allowable amounts that
include contributions to certain
retirement accounts, alimony
payments, interest paid on
student loans, and other
expenditures that are identified
by the IRS.
standard deduction
Fixed
amount all people are allowed to
deduct from their AGI to reduce
their tax liability.
itemized deductions
Specific
expenses that, under tax law,
can be deducted from income
to reduce the amount of income
subject to income tax.
Accreditation
An official recognition that a school or program
meets a certain standard.
Apprenticeship
On-the-job program in which a person may receive formal training.
Baby boom
A period of very high birthrates that occurred between 1946 and 1964.
beneficiary
A person who receives payment from a life insurance provider when the policyholder dies.
business cycle
The economic pattern of alternating periods of shrinking and expanding.
certification
An official document or record that states that a person has met some standard for training or knowledge.
COBRA
The Consolidated Omnibus Budget Reconciliation Act. It allows an individual temporarily to continue health insurance coverage at group rates.
Co-insurance
The share of costs for covered insurance services that an individual is required to pay out of pocket. Often called a co-pay.
Compensation
Money earned and benefits given by employers
Consumer price index
The formal measure of prices used
to calculate inflation that tells us whether things overall are more expensive now than in the past.
Demographics
statistical data relating to the population and particular groups within it.
Deductible
The amount of money that a policyholder must pay before an insurance policy will begin to cover a claim.
Disability insurance
Insures the beneficiary’s earned income against the risk that sickness or injury will make working (and therefore earning) impossible.
economic depression
A severe recession.
economics
The study of the production, distribution, and consumption of goods and services. Economists seek to understand ways that individuals and businesses make decisions, the factors that influence their choices, and the impact these
decisions have on others.
economy
The system related to the production, distribution, exchange, and consumption of goods and services in which individuals, businesses, governments, and the world as a
whole interact.
fraud
Occurs when someone submits false information to get a financial benefit.
global economy
The world in which economies of all countries interact and depend on each other.
gross domestic product
The total dollar amount of all final
goods and services purchased domestically in a given year.
gross pay
Hourly wage multiplied by hours worked.
group plan
Insurance plans that cover a large group of individuals, such as employees of a particular company or local government. Within a group plan, an individual’s high risk or loss is spread across the entire pool of group members.
Health insurance
Provides payment to people who suffer a financial loss as a result of illness or injury.
HIPAA
The Health Insurance Portability and Accounting Act ensures that workers can continue their health insurance
coverage if they switch jobs. The act prohibits insurance companies from denying new employees access to coverage based on their health or preexisting conditions.
Inflation
A sustained increase in the general level of prices. During a time of inflation, most things become more expensive and the purchasing power of money decreases.
Insurance
A financial product that when purchased provides reimbursement paid to a person in the event of certain types
of financial loss.
Internal revenue service
A branch of the U.S. Treasury
Department that carries out the federal tax system.
internship
A temporary, short-term position designed to provide exposure to and training for a particular job.
Liability
What is owed (debt).
Life insurance
Provides payment to a specific person or persons when the policyholder dies.
Macroeconomics
The study of broad economic issues that impact the economy as a whole.
Medicaid
A government-sponsored program that provides health insurance for low-income individuals.
Madicare
Funded by payroll taxes. Provides health care cover-age to older Americans and some younger disabled people.
microeconomics
The study of individual choices or decisions made by smaller units, such as a firm.
Personal income tax
A tax levied on the financial income of individuals.
Policyholder
A person who buys a health insurance policy or subscribes to it through an employer.
Pre existing condition
A health condition that existed before an individual’s policy was granted.
prenium
Regular payments paid to an insurance company in return for coverage.
Recession
A period of time in which the economy is shrinking.
resume
A snapshot of an individual’s qualifications including background, education, and previous work history.
social security
Funded by payroll taxes. It provides payments to eligible retirees and disabled people.
sales tax
Tax collected by a merchant when a purchase is made and then sent to the government.
take home pay
Wages that remain after taxes are withheld (net pay).
term insurance
Life insurance provided over a specific period of time.
universal life insuranse
Provides coverage for a specified term and builds savings for the policyholder.
whole life insurance
Provides coverage for as long as the policy-holder continues to pay the premium.
