Mandatory Expenses
A federal program that pays certain health care expenses for older citizens and others with disabilities
What is Medicare
Taxes paid directly to the government by the taxpayer
Direct tax
Income tax
The form is known as an Employee's Withholding Allowance Certificate; you fill it out when you start a job
What is a Form W-4
This allows you to file your income tax returns online
Electronic filing or e-filing
A government program that pays certain health care costs for eligible low-income individuals and families
What is Medicaid
Tax imposed on one person or entity but shifted to or paid by another
Tax levied by state and local governments on purchases of goods and services
Purchase tax
What is a Form W-2
This is a detailed examination of your tax returns by the IRS
Tax audit
A federal program that provides income when earnings are reduced or stopped because of retirement, serious illness, injury or death
What is Social Security
This is tax that requires those with higher incomes to pay a higher tax rate
Progressive tax
Tax deduction
effectiveness
Fairness
Impact
A government payment or benefit promised by law to eligible citizens
What is an entitlement
This is a tax where those with lower incomes pay a higher tax
Regressive tax
Tax levied on property you own
Property tax
This is a tax benefit that reduces the amount of income that is taxed
Exemption
Workers and employers split FICA taxes. Each pays what percentage
7.65% (6.2 for SS and 1.45 for Medicare)
This is a tax where everyone pays the same tax rate regardless of income
Tax levied on assets
Wealth tax
This is an amount you can subtract from the taxes you owe, if you are eligible; it is a greater advantage than an exemption or tax deduction subtracted from taxable income.
Tax credit
Social Security number serves what 2 main purposes
keep a record of your covered earnings
taxpayer identification number on all tax returns and IRS forms