1
What is the definition of income?
Money an individual or business earns receives as the result of economic activity .
Which type of income would a person receive from renting out an apartment?
Passive income
What type of tax is applied to the income generated by an individual or business ?
Income tax
Which of the following taxes is only imposed on employers and not employees?
Unemployment tax
Which of these is a pre-tax deduction?
Health Insurance premiums
Which of the following is an example of earned income?
Wages from a job
If a person earns a salary of 75,000 per year and is paid semi-monthly , how much is paid each pay period?
3,125.00
What does FICA stand for?
Federal Insurance Contributions Act
What is the primary purpose of the Federal Unemployment Tax Act (FUTA)?
To provide temporary financial assistance to unemployed workers .
What is the purpose of Form W-4 ?
To claim withholding allowances
How is overtime pay calculated according to the Fair Labor Standards ACT (FLSA)
At least 50% more than an employee's normal wage.
What is a bonus in the context of employee compensation ?
A lump sum payment to an employee based an achieving certain performance - oriented goals.
What type of tax is collected at the point of sale?
Sales Tax
What are payroll deductions?
Amounts withheld from an employee's total earnings
What is the effective tax rate?
The taxes owed divided by gross income
What type of income is a commission ?
Earned income
What is a common form of income for self-employed individuals?
Earnings from freelancing
What is a progessive tax system?
A tax system where tax rates increase as income increase
What is another term for total earnings
Gross pay
What information does a pay stub typically include ?
Total earnings , deductions , and net pay
Which form of income is primarily received from government programs?
Transfer payments
What is the primary source of income for government ?
Taxes
Which tax typically funds public services like schools, roads, and emergency medical service ?
Property tax
Which of the followings is a voluntary deduction?
Retirement plan contributions
Which deduction is calculated first when determing taxable income?
Pre-tax deductions