Personal Finance Ch. 7

Terms in this set (21)

revenue
money collected by the government from citizens and businesses in the form of taxes
progressive taxes
taxes that 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 (flat taxes)
taxes for which the rate stays the same, regardless of income
excise taxes
sales taxes imposed on specific goods and services
IRS
Internal Revenue Service
tax brackets
income ranges to which tax rates apply
tax evasion
willful failure to pay taxes
audit
the examination of your tax returns by the IRS
voluntary compliance
all citizens are expected to prepare and file income tax returns
deficit
shortage
exemption
an amount you subtract from your income for each person who depends on your income to live
gross income
all taxable income received including wages, tips, salaries, interests, dividends, unemployment compensation, alimony, child support, and so forth
child support
money paid to a former spouse for support of dependent children
alimony
money paid by one former spouse to support the other
adjusted gross income
the result of adjustments subtracted from gross income
deductions
amount subtracted from gross pay to arrive at take-home pay
itemize
to list allowable expenses on your tax return
standard deduction
a stated amount that you may subtract from adjusted gross income instead of itemizing your deductions
taxable income
the income on which you pay tax
tax credit
an amount subtracted directly from the tax owed
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