AR ch 7 Tax System
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Created by:
karenhaley on January 27, 2012
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17 terms
Terms | Definitions |
|---|---|
 revenue | money collected by the government from residents and businesses in the form of taxes |
| progresssive taxes | taxes taht take a larger share of income as the amount of income grows |
| regressive taxes | taxes that take a smaller share of income as the amount of income grows |
| proportional taxes | or flat taxes, are taxes for which the rate stays the same regardless of income |
| tax brackets | Income tax ranges from 10 to 35 percent based on income |
| voluntary compliance | A system in which all citizens are expected to prepare and file income tax returns of their own accord without force |
| tax evasion | Willful failure to pay taxes. |
| audit | An examination of your tax return and records by the IRS |
| filing status | Your tax-filing group based on your marital status |
| exemption | an amount you may subtract from your income for each person who depends on your income to live |
| dependent | A person who lives with you and for whom you pay more than half of his or her living expenses |
| gross income | All taxable income you receive, including wages, salaries, and tips. |
| adjusted gross income | Gross income less adjustments |
| itemized deductions | Expenses listed on Schedule A that you can subtract from adjusted gross income to determine taxable income |
| standard deduction | A stated amount you can subtract from adjusted gross income if you do not itemize deductions |
| taxable income | The amount on which you will pay income tax |
| tax credit | An amount subtracted directly from the tax owed |
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