Vocab (1)
A rise in the general level of prices over time.
what is inflation?
A tax imposed on the sale of fuel.
What is fuel tax?
A type of employer-sponsored defined contribution retirement plan under section 401(k) of the Internal Revenue Code. It allows a worker to save for retirement while deferring income taxes on the saved money and earnings until withdrawal. The employee elects to have a portion of wages paid directly, or deferred, into a 401(k) account.
What is a 401(k)?
A company retirement plan, such as a pension plan, in which a retired employee receives a specific amount based on salary history and years of service, and in which the employer bears the investment risk. Contributions may be made by the employee, the employer, or both.
What is defined benefit plan?
Income that is available after all necessities (food, shelter, etc.) have been paid for.
What is discretionary income?
A document by which a person regulates the rights of others over his or her property or family after death.
What is a will?
A tax imposed on the transfer of property from a deceased person.
What is inheritance tax?
To leave or give property by will.
What is bequeath?
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.
What is a defined contribution plan?
A dollar-value threshold over which estate taxes are required.
What is an exemption amount?
A word that describes someone who dies without a legal will in place.
What is intestate?
A tax imposed by the federal government on any money earned during a fiscal year.
What is income tax?
A legal arrangement in which one person holds title to money or property, subject to an obligation to keep or use the property for the benefit of another.
What is a trust?
A tax-deferred retirement plan account that provides some tax advantages for retirement savings in the United States.
What is an individual retirement account (IRA)?
A specific power of attorney that allows an agent to make health care decisions in the event that the primary individual is incapable of executing such decisions.
What is a health care proxy?
The total income of an individual or couple filing jointly or separately, including all wages, rental income, and interest on investments (except tax-deferred investments).
What is gross income?
Tax on the profit made by selling an asset that has increased in value, such as stocks or property.
What is capital gains tax?
A type of investment that guarantees payments of specific amounts at specific times. Annuities come in two forms: fixed and variable. Fixed annuities are like CDs that pay a set rate of return. Variable annuities allow you to invest in stocks and bonds, and the rate of return depends on how your investments perform.
What is annuity?
The act of preparing for passing assets and decision-making responsibility on to heirs or other individuals in case of death or incapacitating injury or illness.
What is estate planning?
A form of taxation where people who earn more are charged a higher percentage of their income than people with lower incomes.
What is progressive tax?
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.
What is a mutual fund?
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 are tax brackets?
An individual retirement account that provides tax-free growth, with contributions to the account made post-tax. Roth IRAs may be opened through various investment options, including stocks or mutual funds.
What is a Roth (IRA)?
Instructions covering specific medical directives as to the course of treatment to be taken by caregivers, or, in particular, in some cases forbidding treatment and sometimes also food and water, if the principal is unable to give informed consent due to incapacity.
What is a living will?
Income after all deductions and exemptions have been subtracted. Using a tax table, taxes are figured based on the taxable income.
What is taxable income?