What's Your Number?
A form that details all "non-employee" compensation, including for specific jobs like freelancers or contractors
1099
A tax system that uses tax brackets to collect a larger percentage from the income of high-income earners than it does from low-income earners
Progressive Tax
Total earnings before any deductions are taken
Gross Pay
A government-run insurance program that provides healthcare assistance to low income Americans
Medicaid
Any income (wages/salary) that is generated by working
Earned Income
The standard Internal Revenue Service (IRS) form that individuals can use to file their annual income tax returns
1040
The Social Security and Medicare taxes that people who work for themselves pay on their net earnings.
Self-Employment Tax (SECA)
Total earnings after payroll taxes and other deductions have been taken out; also called take-home pay
Net Pay
A government-run insurance program that provides healthcare assistance to elderly and disabled Americans
Medicare
The set amount of money, per dependent, you can subtract from your taxable income
Exemption
A form that an employer must send to an employee and the IRS at the end of the year to report the employee's annual wages and taxes withheld from their paycheck
W-2
An amount that a government gives back to a taxpayer who has paid more taxes than were due
Tax Refund
A document attached to every paycheck that details your earnings and the amount withheld for taxes, health insurance, retirement funds, etc.
Paycheck Stub
A federal program that provides monthly benefits to millions of Americans, including retirees, military families, surviving families of deceased workers, and disabled individuals
Social Security
The actual rate you pay on your taxes, as a percentage of your overall income
Effective Tax Rate
A form completed by an employee to indicate his or her tax situation (exemptions, marital status, etc.) to the employer, who then withholds the corresponding amount of taxes from each paycheck
W-4
An amount that can be subtracted from person's tax liability that lowers their taxable income
Tax Deduction
Federal and state taxes that all employers must pay, based on a percentage of the employee's salary, toward social services such as Social Security and Medicare
Payroll Tax
The United States agency responsible for collecting taxes
Internal Revenue Service
Money an employer pays toward an employee's benefits, such as retirement plans or health insurance, in addition to their wages
Employer Contributions
Form used by an employer to verify an employee's identity and to establish that the worker is eligible to accept employment in the United States
I-9
The percentage at which taxes are paid on each dollar of income
Tax Rate
Money taken from an employee's gross pay before taxes are withheld; it reduces their taxable income, so they owe less income tax
Pre-tax Deductions
Specific laws passed by the legislature that authorize the government to spend tax money
Appropriations
The actual rate you pay on your taxes, as a percentage of your overall income
Effective Tax Rate