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Taxation Termonology

STUDY
PLAY
Salary, bonuses, tips, gambling gains
Taxable income
Money put in an IRA or 401k
Nontaxable income
IRS
Part of the Treasury Dept
FICA
aka Social Security Tax
Federal Income Tax
Pays for national defense and social programs
State Income Tax
Public education, Police and Fire Depts. and roads
Voluntary Compliance
People are expected to prepare and file their taxes
Social Security Taxes
Pay for retirement and disability benefits
W-2 Form
Summarizes what you've earned and how much the employer withheld for taxes
1040 ez
Form used for single persons with no dependents
Tax exemption
Reduces or eliminates your obligation to pay taxes
Dependent exemptions
Children who live with you for more than half a year, are Under 19 years old (24 if a full time student)
Personal exemptions
Reduces your taxable income if you are not a dependent
W-4 Form
Employee's withholding allowance certificate