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Personal Finance Ch. 7

Terms in this set (21)

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

sales taxes imposed on specific goods and services

Internal Revenue Service

income ranges to which tax rates apply

willful failure to pay taxes

the examination of your tax returns by the IRS

voluntary compliance

all citizens are expected to prepare and file income tax returns

an amount you subtract from your income for each person who depends on your income to live

all taxable income received including wages, tips, salaries, interests, dividends, unemployment compensation, alimony, child support, and so forth

money paid to a former spouse for support of dependent children

money paid by one former spouse to support the other

adjusted gross income

the result of adjustments subtracted from gross income

amount subtracted from gross pay to arrive at take-home pay

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

the income on which you pay tax

an amount subtracted directly from the tax owed

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