Tax Planning and Tax Returns Overview

A collection of vocabulary flashcards summarizing key concepts and terms related to tax planning and tax returns.

Sales Tax

A tax imposed on sales of goods and services, varying by product.

Property Tax

A tax collected on real estate owned by an individual or legal entity.

Inheritance Tax

A tax collected on property left to heirs in a will after a person's death.

Gift Tax

A federal tax on the transfer of property to another person without receiving anything in return, applicable if the value exceeds $11,000.

Income Tax

A tax on wages, salaries, and self-employed earnings, serving as a main source of income for the federal government.

IRS

Internal Revenue Service, the federal agency responsible for tax collection and enforcement of tax laws.

Dependent

A person who relies on someone else for financial support, often a child or elderly relative, and must meet certain income and relationship criteria.

Standard Deduction

A fixed amount set by the IRS that taxpayers can subtract from their income before income tax is applied.

Tax Credit

An amount of money that can be subtracted directly from the taxes owed.

Tax Bracket

Categorization of income ranges that determines the rate of tax owed.

Gross Income

Total income received before any deductions or taxes.

Adjusted Gross Income

Gross income after adjustments, used to determine taxable income.

Estimated Tax Payments

Payments made to the IRS to cover expected tax liability throughout the year.

W-4 Form

A form used by employees to indicate their tax situation to the employer, allowing for correct withholding of income taxes.