Filing Taxes Vocab
What is the name of the penalty you get when you file your taxes but don't pay them.
Failure-to-pay penalty
What is Earned Income?
Any income (wages/salary) that is generated by the work someone performs
What is a sales tax?
A tax on goods and services that goes to a state or local government
What is income tax?
Tax on a person's income
Who uses 62% of our income taxes on mandatory spending?
The federal government
When is Tax Day?
April 15
What is Passive Income?
Money earned on a regular basis with little or no effort required to maintain it
What does IRS stand for?
Internal Revenue Service
Which tax is based on how much money/possessions you have?
Wealth tax
Sales tax is a percentage of what?
The total sale price
As a high schooler, what is the minimum amount of money you need to be making in order for you to HAVE to pay taxes.
$12,200
What is spending more than you earn; an economic policy in which the government spends public funds raised by borrowing rather than by taxation
Deficit Spending
When a person is self employed, what percent of their budget should the set aside for taxes?
25-30%
What kind of tax is the tax on the positive difference between the sale price and the value of a gift when it was inherited?
Capital Gains Tax
What percent of your pay check will go toward FICA taxes?
7.5%
Name 3 Types of Forms that are filled out when filing taxes.
Form W-2, Form W-4, Form 1040, Form 1099-MISC, Form 1098, Form 1098-T, Form 1098-E, Form 1099-INT, Form 1099-DIV
What is an audit?
An official IRS inspection of a tax return to make sure the income and deductions are accurate
What is money earned on a regular basis with little or no effort required to maintain it
Passive Income
What is kind of tax is a tax on any asset that exceeds the yearly amount you can transfer to another person without compensation of equal value?
Gift Tax
When you face a failure-to-pay penalty what is the range of percentages of your unpaid taxes that you are being charged?
Name one thing a failure-to-file penalty entails.
5% of your unpaid taxes for each month your tax return is late
OR
a minimum of $435 or 100% of the taxes you owe if you file 60 days late
What is a list of all eligible expenses that can be claimed to decrease taxable income?
Itemized Deductions
What is income from an investment sold at a higher price than you paid for it
Portfolio Income
What is the difference between a property tax and an estate tax?
A property tax is paid by anyone who owns property whereas an estate tax is a tax imposed on a property owner's right to transfer their estate after death
In 2020 what was the percentage that the tax rates ranged from?
10%-37%