Vocab
Gross Income
What is salary before taxes
Employee generated (when starting a new job); used to see how much the employee should be taxed
What is the W-4 form
The Standard Deduction in 2018
What is $12,000
The first step to filing
What is gathering total wage amount from ALL W-2 forms
Net Pay
What is salary after taxes
Dependent
Who is a person who relies on someone else for financial support
Employer generated; used to show you the wages paid and taxes withheld; must be completed by the employer by the last day of January
What is the W-2 form
Ways to file
What is digital and paper
The second step to filing
What is subtracting any deductions (mainly for teens)
Deduction
What is anything a tax payer uses to lower taxable income
IRS
What is the Internal Revenue Service
Bank/investor generated; received at the end of the year; shows how much interest you've been paid; becomes part of your income
What is the 1099-Int form
The 2 educational credits that are allowed to be taken when students are enrolled in college
What is the American Opportunity Education Credit (AOEC) and the Lifetime Learning Credit (LLC)
The third step to filing
What is having the adjusted gross income and figuring what how much you have to pay tax on
April 15
What is the date taxes are due each year
Tax Evasion
What is failure to pay taxes
standard IRS form that tax payers use to file their annual income taxes
1040
The 5 filing statuses
What is single, married filing jointly, married filing separately, head of household, or widowed
The fourth step to filing
What is looking in the 1040 booklet for the tax table to see how much tax you owe
Audit
What is being flagged by the IRS and thoroughly checking your files
Progressive Tax System
What is tax rates increases as income increases
To claim one of the education credits you must use,
What is the 8812 Form
One of the biggest credits that a parent can get to increase their refund
What is the Child tax credit (children under 17)
The fifth step to filing
What is subtracting the amount you "owe" from the amount that was taken from your paychecks, which is on your W-2; this is how much you will be refunded.
Proportional Tax System
What is everyone pays the same % of taxes regardless of income