Income and Taxes

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23 Terms

1
Gross Income
the amount you earn before taxes and other payroll deductions
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2
Net Income
what a person earns after payroll taxes and other deductions are taken out; often referred to as take-home pay​​​​​​​
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3
Withholdings
the portion of an employee’s pay held back to cover taxes and other deductions​​​​​​​
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4
Fiscal Year
a one-year period that governments or companies use for financial reporting​​​​​​​
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5
Deficit Spending
spending more than you earn; an economic policy in which the government spends public funds raised by borrowing rather than by taxation​​​​​​​
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6
National Debt
the total amount of debt a country owes to companies and other countries as a result of deficit spending
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7
Earned Income
any income (wages/salary) that is generated by the work someone performs
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8
Wage
money paid by the hour and for an agreed number of hours per week; especially for unskilled or manual labor​​​​​​​
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9
Minimum Wage
the smallest amount that employers can legally pay their employees per hour of work​​​​​​​
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10
Salary
a fixed annual amount earned by an employee, typically paid weekly, biweekly, or monthly​​​​​​​
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11
Passive Income
money earned on a regular basis with little or no effort required to maintain it​​​​​​​
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12
Portfolio Income
income from an investment sold at a higher price than you paid for it ​​​​​​​
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13
Paper Asset
a representation (on paper) of stocks, bonds, currencies, mutual funds, etc.
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14
Income Tax
tax paid out by anyone who earns an income
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15
Tax Bracket
the income ranges in which tax rates apply​​​​​​​
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16
Tax Liability
the total tax a person or business has to pay​​​​​​​
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17
Tax Return
a report that a taxpayer has to submit annually to the government and is used to determine a person‘s tax liability
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18
Tax Day
the annual deadline for filing your income taxes; usually falls on April 15
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19
Standard Deduction
the dollar amount people can subtract from their income before the tax is calculated
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20
Tax Schedule
a special tax form to report certain types of income or deductions​​​​​​​
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21
Itemized Deductions
a list of all eligible expenses that can be claimed to decrease taxable income​​​​​​​
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22
Tax Credit
an amount of money a taxpayer can subtract from the taxes they owe ​​​​​​​
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23
Audit
an official IRS inspection of a tax return to make sure the income and deductions are accurate
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