Income
What is the pay document an employer gives each year that summarizes wages and taxes withheld?
Paycheck
Which IRS form do most individuals use to file their annual federal income tax return?
1040
What is an excise tax or sin tax and give one example
Gas, Alcohol, Tobacco
What federal program provides health coverage primarily for people age 65 and older?
Medicare
How can increasing itemized deductions affect the amount of income tax a person pays?
It will lower the amount of income that is able to be taxed?
Define gross pay.
Earnings before Taxes
Which form does an employee complete to tell their employer federal income tax withholding preferences?
W-4
Explain the difference between a direct tax and an indirect tax with an example of each.
Briefly describe the purpose of Social Security.
Which is better a deduction or credit?
Credit
What is net income (take-home pay)?
Earnings after taxes
Who provides you a W-2, and why do you need it when filing taxes?
Your employer
What is property tax and who typically pays it?
Homeowners, landowners
How is Social Security funded?
We pay into it and then we can withdraw it starting at 59.5
What is the tax that you pay if you receive assets from someone who passed away?
Inheritance tax
Name two common payroll deductions taken out of a paycheck before the employee receives net pay.
Medicare and Social Security
How long is it generally recommended to keep filed tax returns and supporting documents, and why?
3 years in case of an AUDIT
Define progressive taxes
Taxes that depend on how much income you earn.
At what standard age do most people become eligible for Medicare?
65
What is the tax you pay if you profit from selling an asset?
Capital Gains Tax
How many hours must you work before earning overtime pay?
40
What tax document do you need if you are self employed?
1099
When you buy clothes or groceries what tax applies?
Sales tax
What is the earning threshold for people who want to use social security?
About 22,000
How can we avoid certain wealth taxes when we pass away?
Placing every asset in a trust.