Filing Taxes

Tax

Payment imposed on a taxpayer by the government.

IRS (Internal Revenue Service)

Agency of US treasury that provides services to taxpayers.

Tax Evasion

Serious crime that is punishable by a fine or prison. When you don’t pay your taxes (personal and business). 

Audit

An examination of income tax return that questions the validity of the tax return.

Taxable Income

After the standard deductions and exemptions are subtracted from the adjusted gross income.

Deductions

Amounts both required and optional that are subtracted from gross earnings. 

Exemptions

Amount you may subtract from your income based off of each person who depends on your income to live.

Dependent

Person who lives with you or you pay more than half of their living expenses.

Federal Income Tax

Deduction on total earnings based on marital status and exemptions. 

FICA (Federal Insurance Contributions Act)

Social security tax (6.2%) and medicare (1.45%)

W-4 Form

Indicates the marital status and number of exemptions.

W-2 Form

Wage and tax statement. Provided annually to each employee as well as the Social Security administration. 

1040 EZ Form

If you are single/married, filing jointly, and claim no dependence, your taxable income must be less than $100,000 and interest earned $1500 or less. 

When do all tax returns need to be submitted by?

April 15th

IRA

Individual retirement account before taxes

Roth IRA

Type of IRA where contributions are taxed but earnings are not.

Employee Withholding Statement

Form provided annually showing total wages and tax deductions.

401 K

Qualified retirement plan sponsored by your employer.