Total amount of money a worker earns in a pay period |
gross pay |
Total amount of money a worker takes home in a pay period |
net pay |
Another term for net pay is |
take-home pay |
What is NOT the main purpose of taxation ? |
Retailing |
Public programs such as nation defense, public schools, Social Security, and fire and police protection are all paid for through |
tax revenue |
A sales tax is sent to the government by |
the merchant who sold the item |
Real estate taxes are calculated based on the |
estimated value of the property |
In general, which type of tax is typically used to fund local schools ? |
real estate |
Federal income taxes, state taxes, and Social Security withholding’s are all |
payroll taxes |
FICA refers to payroll taxes withheld for |
Social Security and Medicare |
Which of the following would LEAST likely be included on an employee’s pay stub ? |
the employee’s total tax owed for the year |
What is the government body that enforces federal tax laws and collects the taxes ? |
IRS |
You would use a 1040 or a 1040EZ to |
file a tax return |
Taxes are figured based on your earnings during which time period |
the calendar year |
The deadline for filing your federal tax return each year is |
April 15th |
A tax paid as part of the purchases price of an item |
sales tax |
The total amount of money an individual takes home during a pay period |
net pay |
Money for the government withheld from an individual’s paycheck |
tax |
Any money collected by a government from its citizens for the purpose of operating the government |
payroll tax |
the total amount of money an individual earns in a pay period |
gross pay |
an annual report of all information related to your income taxes |
tax return |
a tax paid to the government based on the value of the property an individual owns |
real estate tax |
primarily used to fund local schools |
real estate taxes |
include federal and state income taxes |
payroll taxes |
a tax for which taxpayers often receive a separate bill |
real estate taxes |
collected by merchants and sent to the government |
sales taxes |
are not paid in the same way by people who are self employed |
payroll taxes |
imposed by many states but not by the federal government |
sales taxes |
include FICA payments |
payroll taxes |
____ may be listed as OASDI (Old-Age, Survivors and Disability Insurance) |
Medicare and Social Security taxes |
An employer matches employees’ contributions to ___ and sends the total amount to the government |
FICA taxes |
What provides payments to eligible retirees and people with disabilities |
Social Security |
Medicare is a government ____ program |
health insurance |
In general, the more money a person earns, the ____ they must pay taxes |
higher the rate is at which |
typically a tax of 6.20% of your salary |
Social Security |
a tax of 1.45% of your salary |
Medicare |
the amount of salary taxed is capped at a certain level |
Social Security |
FICA tax |
both Social Security and Medicare |
a government health insurance program |
Medicare |
benefits for older Americans |
both Social Security and Medicare |
Single, head of household, and married filing joint return are all examples of |
filing status |
in general, your applicable tax rate and rules differ depending on which ____ you chose |
filing status |
Most people are considered dependents of their parents or guardians by the IRS until they reach the age of |
18 |
When your parent or guardian claims you as a dependent on a tax return, they are able to |
lower what they owe in taxes |
The first step in determining the amount of federal tax you owe is |
calculating your gross income |
Shortly after the end of the year, you will receive a ____ form summarizing all of your relevant income and tax withholding information from each employer you worked for during the year |
W2 |
AGI stands for |
adjusted gross income |
A winner of any cash prize, such as those won in a lottery, or game show, totaling over $600 would be best advised to expect a pay about ____ of the prize in taxes |
50% |
What source of income would NOT be counted as part of an individual’s gross income ? |
child support payments reveived |
The standard deduction is a fixed amount ___ are allowed to deduct from their ____ to reduce their tax liability |
all taxpayers; AGI |
The amount of the standardizes deductions varies according to your ___ and whether you are over or under the age of 65 |
filing status |
Which of the following would you currently LEAST likely be able to claim as an itemized deduction on your federal tax return |
money paid in rent |
Accurate completion of your tax return will show whether you underpaid your taxes and need to pay additional income tax or if you overpaid and will receive a |
refund |
When filing their tax returns, some low income families will receive more money back in the form of a ____ than was withheld from their paychecks |
earned income credit |
figured by taking an individual’s total income and subtracting certain allowable amounts |
adjusted gross income |
a fixed amount anyone is allowed to subtract from their AGI to reduce tax liability |
standard deduction |
a specific expense that can be subtracted from an individual’s AGI to reduce tax liability |
itemized deduction |
the total amount of a person’s income from almost any source |
gross income |
the positive difference between what you sold an asset for and what you paid for it |
capital gain |
Briefly explain the purpose of taxation |
run government, schools, services such as police, and fire department |