Tax Liability
This is the formula result after taxable income is multiplied by the tax rate.
What is gross tax liability?
This form reports most interest income to taxpayers.
What is Form 1099-INT?
Contributions to a traditional IRA may be this type of deduction.
What is above-the-line?
Unlike traditional IRA contributions, Roth IRA contributions are made with this type of dollars.
What are after-tax dollars?
This form reports annual wages and tax withholding.
What is Form W-2?
Subtracting tax credits and prepayments from gross tax liability gives you this.
What is tax due or refund?
Ordinary dividends are reported on this form.
What is Form 1099-DIV?
Distributions from traditional IRAs are generally taxed as this.
What is ordinary income?
Qualified Roth IRA distributions are this, making them attractive for retirement.
What is tax-free?
Box 1 of the W-2 reports this amount.
What are wages, tips, and other compensation?
These credits can reduce liability to zero but cannot generate a refund.
What are nonrefundable credits?
Dividends that qualify for lower long-term capital gains tax rates are called this.
What are qualified dividends?
At what age must Required Minimum Distributions (RMDs) begin (under current law)?
What is age 73?
Roth contributions are limited based on this income measure.
What is Modified Adjusted Gross Income (MAGI)?
Social Security wages are reported in this box.
What is Box 3?
These are payments made throughout the year that reduce your final liability, such as withholding.
What are prepayments?
Interest from these types of bonds is generally tax-exempt at the federal level.
What are municipal bonds?
The penalty for early withdrawal from a traditional IRA before age 59½ is this percentage.
What is 10%?
To be considered qualified, a Roth IRA must be open at least this long.
What is 5 years?
Medicare wages and tips are shown in this box.
What is Box 5?
DAILY DOUBLE!
If a taxpayer owes $8,000 in gross tax liability, had $6,000 withheld, and qualifies for $1,500 in refundable credits, what is the result?
What is a refund of $-500 (actually $- - check - $0. Actually: $8,000 liability – ($6,000 withholding + $1,500 credits) = $500 refund)?
If a taxpayer earns $1,000 in qualified dividends and is in the 15% capital gains bracket, how much tax is owed?
What is $150?
Contributions to a traditional IRA may not be deductible if the taxpayer is covered by this at work and exceeds income limits.
What is an employer-sponsored retirement plan?
Unlike traditional IRAs, Roth IRAs do not require these distributions during the owner’s lifetime
What are Required Minimum Distributions (RMDs)?
The letter code “DD” in Box 12 shows the cost of this benefit.
What is employer-sponsored health coverage?