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Terms in this set (34)
A 1040EZ form is an alternative to the Internal Revenue Service's (IRS) 1040 income tax form and offers a faster and easier way to file taxes, meant for taxpayers with rudimentary tax situations.
The W-2 form is the form that an employer must send to an employee and the Internal Revenue Service (IRS) at the end of the year. The W-2 form reports an employee's annual wages and the amount of taxes withheld from his or her paycheck.
Ability to pay
The ability-to-pay principle in taxation maintains that taxes should be levied according a taxpayer's ability to pay. This progressive taxation approach places an increased tax burden on individuals, partnerships, companies, corporations, trusts and certain estates with higher incomes.
Adjusted gross income
Adjusted gross income (AGI), or your income minus deductions, is important when calculating your total tax liability. It not only determines your tax bracket, but also tells you which credits you qualify for and how much you're able to contribute each year to your tax-deferred retirement accounts
The total sum of money due for the purchase of a good or service that must be paid by the set due date. In relation to taxes, the money owed to the government when required tax amount totals a greater number than total tax payments previously made.
A dependent is an individual whom a taxpayer can claim for credits and/or exemptions. A dependent is an individual, such as a qualifying child, whom a taxpayer can claim on his or her federal and some state income tax returns.
An individual with a disability is defined as a person who: (1) has a physical or mental impairment that substantially limits one or more major life activities; (2) has a record of such an impairment; or (3) is regarded as having such an impairment.
the action of deducting or subtracting something.
the dividend will be paid without deduction of tax
an exemption on their tax return that reduces your tax bill in the same way a deduction does. Federal and state governments frequently exempt organizations from income tax entirely when it serves the public, such as with charities
Federal income tax
A federal income tax is a tax levied by the United States Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts and other legal entities. Federal income taxes are applied on all forms of earnings that make up a taxpayer's taxable income, such as employment earnings or capital gains.
Federal Insurance Contributions Act (FICA) Tax
Federal Insurance Contributions Act (FICA) tax /ˈfaɪkə/ is a United States federal payroll (or employment) tax imposed on both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, the disabled, and children of deceased workers.
Form W-4, Employee's Withholding Allowance Certificate
A W-4 form is a form completed by an employee to indicate his or her tax situation (exemptions, status, etc.) to the employer. The W-4 form tells the employer the correct amount of tax to withhold from an employee's paycheck.
Gross income is the starting point for determining Federal and state income tax of individuals, corporations, estates and trusts, whether resident or nonresident. "Except as otherwise provided" by law, Gross income means "all income from whatever source," and is not limited to cash received.
An income tax is a tax that governments impose on financial income generated by all entities within their jurisdiction. By law, businesses and individuals must file an income tax return every year to determine whether they owe any taxes or are eligible for a tax refund.
Interest income(1099-INT Form)
The form issued by all payers of interest income to investors at year's end. Form 1099-INT breaks down all types of interest income and related expenses. Payers must issue Form 1099-INTs for any party to whom they paid at least $10 of interest during the year.
International Revenue Services (IRS)
The Internal Revenue Service (IRS) is a United States government agency that is responsible for the collection and enforcement of taxes. The IRS was established in 1862 by President Lincoln and operates under the authority of the United States Department of the Treasury
a tax on items considered undesirable or harmful, such as alcohol or tobacco.
For example the medicare tax was 1.45% of wages in 2011 and other employment compensation. The employer would contribute a matching 1.45%, for a total Medicare tax of 2.9%.
Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff. Payroll taxes generally fall into two categories: deductions from an employee's wages, and taxes paid by the employer based on the employee's wages.
A progressive tax is a tax in which the tax rate increases as the taxable amount increases. The term "progressive" refers to the way the tax rate progresses from low to high, with the result that a taxpayer's average tax rate is less than the person's marginal tax rate.
A property tax (or millage tax) is a levy on property that the owner is required to pay. The tax is levied by the governing authority of the jurisdiction in which the property is located; it may be paid to a national government, a federated state, a county or geographical region, or a municipality.
A proportional tax is a tax imposed so that the tax rate is fixed, with no change as the taxable base amount increases or decreases. The amount of the tax is in proportion to the amount subject to taxation.
pay back (money), typically to a customer who is not satisfied with goods or services bought
A regressive tax is a tax that takes a larger percentage from low-income people than from high-income people. A regressive tax is generally a tax that is applied uniformly. This means that it hits lower-income individuals harder.
a fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee, especially a professional or white-collar worker.
Income tax return
The definition of an income tax return is a document you file with the Internal Revenue Service or the state tax board reporting your income, profits and losses of your business and other deductions as well as details about your tax refund or tax liability. A 1040 form is an example of a federal income tax return
a tax on sales or on the receipts from sales.
Social security tax
A Social Security tax is the tax levied on both employers and employees used to fund the Social Security program. Social Security tax is usually collected in the form of payroll tax or self-employment tax
Taxable income is the amount of income that is used to calculate an individual's or a company's income tax due. Taxable income is generally described as gross income or adjusted gross income minus any deductions, exemptions or other adjustments that are allowable in that tax year.
a compulsory contribution to state revenue, levied by the government on workers' income and business profits or added to the cost of some goods, services, and transactions.
A source of income for workers who have lost their jobs through no fault of their own. Workers who quit or are fired are generally not eligible for unemployment insurance.
Workers' compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence.
Voluntary compliance is one of possible ways of practicing corporate social responsibility. Voluntary compliance is seen as an alternative to the state-imposed regulations on a company's behavior
a vote is a formal indication of a choice between two or more candidates or courses of action, expressed typically through a ballot or a show of hands or by voice.