Personal Finance - NAF Lesson 18
What does the word "annuity" mean?
A type of investment that guarantees payments of specific amounts at specific times.
What is a 401(k)?
It allows a worker to save for retirement while deferring income taxes on the saved money and earnings until withdrawal.
What is the definition of an "estate tax"?
A name given to various taxes that arise on the death of an individual also called inheritance tax or death duty.
What is "capital gains tax"?
Tax on the profit made by selling an asset that has increased in value, such as stocks or property.
What does "tax brackets" mean?
The divisions at which tax rates change in a progressive tax system. Income past a certain point will be taxed at a higher rate.
What does IRA stand for?
Individual Retirement Account
What is a defined contribution plan?
A company retirement plan, such as a 401(k) plan or 403(b) plan, in which the employee elects to defer some amount of his or her salary into the plan, and he or she bears the investment risk.
A document by which a person regulates the rights of others over his or her property of family after death is called..?
Will
A tax paid by owners of the property, based on the estimate of the property's value is...?
Property Tax
Fuel tax means...?
A tax imposed on the sale of fuel.
Inflation
What is a mutual fund?
A professionally managed investment vehicle that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities.
A legal arrangement in which one person holds title to money or property is...?
Trust
What tax is imposed by the federal government on any money earned during a fiscal year?
Income Tax
Income that is available after all necessities (food, shelter, etc) have been paid for.
Discretionary Income
A social insurance program funded through dedicated payroll taxes is called...?
FICA (Federal Insurance Contributions
What does Social Security keep track of?
Social Security keeps track of all workers' earnings throughout their careers.
What does the probate court determine?
They determine the validity of wills, enforce the provisions of the valid will, and provide for the fair distribution of the assets of persons who die intestate.
What are the many types of tax credits?
Earned Income, Tax Credit, and Child Tax Credit.
What does gross income include?
They include wages, rental income, and interest on investments.
What do pensions contain?
Many pensions contain an insurance aspect since they often will pay benefits to survivors or disabled beneficiaries.
How may a Roth IRA be opened?
What are the three categories of advanced medical directives?
What can progressive taxes do?
People who earn more are charged a higher percentage of their income than people with lower incomes.
What are the most common deductions?
Business expenses, charitable donations, medical expenses, property taxes, interest on mortgages or equity lines of credit, and tax advice.