Taxes

Proportional

same tax rate for all people

Regressive

taxes that impact lower income individuals more than wealthier individuals

Progressive

the more you make, the more you pay

W-4 Form

Form telling your employer how much federal tax to withhold from your paycheck

W-2 Form

Form that lists your wages, tips, Federal Income Tax, Social Security, & Medicare contributions

1040 Form

Form used to file your taxes

1099-INT

What the bank sends you if you earn enough interest

What determines how much is withheld from your paycheck

estimated annual income

Federal Income Tax

Pays for nationwide healthcare, social security/pensions, and defense, comes out of your W-4 tax deductions

Local Income Tax

Pays for local education, roadways, and public assistance

State Income Tax

Pays for statewide education, highways, and public assistance, not all states use it

Medicare tax is _% of gross income?

1.45

Medicare

Pays for healthcare 65 and older

Tax Liability

The tax you owe and are responsible for paying

Head of Household filing status

single parent with a child

Tax Credit

reduces your tax liability

Social Security Tax is _% of your income?

6.2

Standard Deduction

Fixed dollar amount set by the government that automatically lowers your taxable income

Itemized Deduction

Specific expenses you can list individually on your tax return to subtract from your gross income to lower your taxable income