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16 terms

Chapter 7 - Federal Income Tax

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adjusted gross income
Gross income minus allowed adjustments.
alimony
Money paid to support a former spouse.
audit
A procedure whereby a tax return is questioned by the IRS.
child support
Money paid to a former spouse to support dependent children.
deductions
Expenses allowed by law that are subtracted from adjusted gross income.
exemption
An allowance for each person dependent on the taxpayer's income.
gross income
All the taxable income received during the year, including wages, tips, salaries, interest, dividends, alimony, and unemployment compensation.
itemized deductions
A listing of allowable deductions such as medical expenses, mortgage interest and tax payments, and contributions.
progressive taxes
A tax based on the more income earned, the more tax paid.
proportional taxes
A tax wherein the rate remains constant, regardless of the amount of your income.
regressive taxes
A tax that decreases in proportion to increases in income.
revenue
Money collected by the government through taxes.
standard deduction
A base amount allowed according to filing status in lieu of itemizing deductions.
taxable income
The net amount of income, after allowable exemptions and deductions, on which income tax is computed.
tax evasion
Willful failure to pay taxes.
voluntary compliance
A system whereby citizens are expected to prepare and file appropriate tax returns.