Vocabulary
Salary
a fixed payment for work and is expressed as an annual figure.
Tax Return
A report containing information used to calculate taxes owed by the taxpayer.
Employee benefit
a form of noncash compensation received in addition to a wage or salary.
Should a taxpayer read the instructions provided with the form?
Yes
Internal Revenue Service (IRS)
The IRS publishes free instruction booklets annually.
Tip
Money paid for service beyond what is required.
When do you file tax returns?
Tax returns must be filed no later than April 15 of the year after the income was earned.
Some common types of employee benefits.
health insurance, dental insurance, retirement plan, sick leave, vacation time.
What is step 1?
To fill in personal information.
Volunteer Income Tax Assistance (VITA) Program.
The VITA Program is an IRS service that offers free tax help to lower-income people who need assistance in preparing their tax returns.
Bonus
Money added to an employee’s base pay.
Filing Status
Filing status is a category that determines filing requirements, standard deduction, eligibility for certain credits, and the correct tax.
Example of a retirement savings plan.
401(k)
Standard deduction
A dollar amount that non-itemizers may subtract from their income before income tax is applied.
Tax Counseling for the Elderly (TCE) Program.
The IRS TCE Program provides free tax assistance to individuals who are age 60 and older.
Payroll Deduction
A subtraction from gross pay.
What is the type of Documentation?
Form W-2
Does the person have to spend income personal income when an employer provides an benefit?
No
Can a tax form have a unsigned signature?
No
Tax Preparation Services.
Many tax attorneys and certified public accountants specialize in tax matters.
FICA taxes
Taxes paid by the employee and employer used to finance the federal Social Security and Medicare programs.
What are the different types of income?
Unearned income, gross income, and adjusted gross income.
Compensation
Wages or salaries and benefits paid to employees.
Tax tables
government-issued tables that show a taxpayer’s total tax obligation for a year based on the amount of total taxable income.
Tax Preparation Guides
Each year, tax guides are published by various sources and are available for purchase.