Deductions 1
What you earn (based on your wages or salary) is called your
gross income
Employers withhold (or _____________) some of their employees’ pay
deduct
Money may also be deducted, or ___________, from a paycheck to pay for retirement or health benefits.
subtracted
Who determines the percentages employees will pay for payroll taxes?
The federal government
The Medicare tax provides medical benefits to people age ________ or older
65
Employee deductions cover what two types of taxes?
payroll taxes and income tax
True of False,
Income tax is the same for every American citizen, regardless on salary and income.
False
The amount of money you actually receive (after tax withholding and other deductions are taken out of your paycheck) is called your
net income
Payroll taxes taken from your paycheck include...
Social Security and Medicare taxes
Social Security tax provides retirement and ___________ benefits for employees and their dependents.
disability
If you are an employee, you will have to pay ________
________________.
income taxes
Another term for income is?
take-home pay
The government will determine how much __________ ___________ you owe based on the amount of money you receive in earned and unearned income.
income tax
Medicare is also called?
FICA
The Medicare tax provides medical benefits to people age 65 or older, certain younger people with disabilities, and people with _____________________.
permanent kidney failure requiring dialysis or a transplant
Salaries, wages, tips, commissions make up _______
______.
earned income
True of False,
Federal income tax rates are the same across the country.
True
What government agency is responsible for ensuring the U.S. tax system is carried out?
IRS
Employers pay _________ of payroll taxes.
part
There’s a maximum ____________ amount of Social Security tax that can be withheld per employee.
annual
Some states and localities also have ___________
_____________.
state and local income tax
Interest and dividends make up __________ ________.
unearned income
IRS stands for?
Internal Revenue Service
FICA stands for?
Federal Insurance Contributions Act
Certain younger people with disabilities are entitled to ___________ _________.
Medicare benefits