Tax Basics
This is when households and businesses give part of their income to the government.
What are taxes?
This tax system requires everyone to pay the same percentage of income.
What is a proportional tax?
This form verifies that you are authorized to work in the United States.
What is Form I-9?
This tax is added to the price of goods at the time of purchase.
What is sales tax?
This is income that will be taxed at a later date, such as earnings from a traditional IRA.
What is tax-deferred income?
This term means the act of imposing taxes on individuals and corporations.
What is taxation?
This tax system increases the tax rate as income increases.
What is a progressive tax?
This form summarizes an employee’s annual earnings and deductions.
What is Form W-2?
This is the annual tax paid on real or personal property.
What is property tax?
This is the total income you earn before deductions.
What is gross income?
This federal agency collects tax money in the United States.
What is the Internal Revenue Service (IRS)?
This tax system causes higher-income households to pay a smaller share of their income than lower-income households.
What is a regressive tax?
This form tells your employer how much federal income tax to withhold.
What is Form W-4?
This tax is levied on the appreciation of assets like stocks or real estate.
What is capital gains tax?
This is your gross income minus deductions.
What is Adjusted Gross Income (AGI)?
This tax is levied on income such as wages, salaries, dividends, and interest.
What is income tax?
This is the percentage applied to the last dollar you earn.
What is the marginal tax rate?
This form reports income on which taxes were not withheld.
What is Form 1099?
This tax is levied on the right of an heir to receive property from someone who has died.
What is inheritance tax?
This is the amount of income taxed after deductions but before tax credits.
What is taxable income?
This type of tax is taken from wages and salaries to fund programs like Social Security and Medicare.
What is a payroll tax?
This type of tax uses a single rate for all taxpayers obligated to pay it.
What is a flat tax?
This act oversees payroll taxes that fund Social Security (6.2%) and Medicare (1.45%).
What is FICA (Federal Insurance Contributions Act)?
This tax helps fund retirement and disability benefits and is paid by both employers and employees.
What is Social Security tax?
This refers to income or investment on which no tax is collected.
What are exemptions?