Vocab 1
The amount of money received from earnings from a job or business, an allowance, gifts, interest on savings, or proceeds from selling your possessions.
Income
An important IROS form used to show your income earned in a year.
Form 1040
What is the difference between net pay and gross pay?
Gross pay is your paycheck before tax deductions are made.
Net pay is your paycheck after the deductions are made.
A tax on income paid by both the employee and the employer to fund the Social Security system.
Social Security Tax
What does FICA stand for?
Federal Insurance Contributions Act
Money set aside for use in future events that may benefit you.
Opportunity fund
A fixed reduction amount.
Standard deduction
How do you calculate net pay?
1.) Determine the employee's gross pay
2.) Obtain federal and state income tax tables
3.) Apply federal and state income taxes
4.) Apply Social Security tax rates
5.) Deduct Medicare taxes
6.) Subtract other deductions
7.) Finalize net pay
An employer- sponsored retirement plan, sometimes with matching funds.
401(k)
What's another term for paycheck?
Pay stub
The amount of tax on earnings at the state level based on percent of income.
State income tax
Means to list deductions individually.
Itemized
What are Retirment benefits?
- Employees become paid whenever they retire
- Employees share the cost of benefits through co-payments
- Other benefits may include dental, legal services, and tuition credit
States impose a local income tax through city and county taxes.
Local State Tax
If your losing money, what is it called?
Negative Cash Flow
Refers to all of the income an individual receives in a year.
Gross Income
Includes different parts of health care support to provide insurance against loss of income and benefits to eligible recipients.
Medicare
How can social security taxes be beneficial?
Fund the retirement, disability. and survivorship benefits.
The amount of federal tax on earnings imposed by the IRS based on tax tables.
Federal Income Tax
What's a W-4?
An "Employee's Withholding Certificate." It's filled out by an employee.
A reduction of taxes paid on gross income.
Tax deduction
A health insurance program for low- income individuals and people with limited resources.
Medicaid
Why is Federal Insurance Contributions Act helpful?
It funds the Social Security and Medicare programs.
Represents the amount of money that your tax calculations are based on.
Taxable Income
What are benefits of Medicare?
- Vision care
- Dental care
- Hearing care
- Wellness