personal finance exam 2

Traditional IRA —

Tax‑advantaged retirement account with pre‑tax contributions; taxed when withdrawn

Roth IRA —

Tax‑advantaged retirement account with post‑tax contributions; tax‑free withdrawals.

401(k) —

Employer‑sponsored retirement plan with high contribution limits and possible company match.

403(b) —

Retirement plan for nonprofit or education employees; similar to a 401(k).

457 Plan —

Retirement plan for government employees with special early withdrawal rules.

Simple IRA —

Employer retirement plan for small businesses with simpler administration.

SEP IRA —

Employer‑funded retirement plan for self‑employed or small businesses.

Brokerage Account —

Taxable investment account with no special tax advantages.

Pre‑tax Contribution —

Money deposited before taxes; reduces taxable income now.

Post‑tax Contribution —

Money deposited after taxes; no deduction now; tax‑free later.

Company Match —

Employer contribution to your retirement plan based on your own contributions.

Vesting —

Schedule determining when employer contributions become fully yours.

Contribution Limit —

Maximum amount you can deposit into a retirement account each year.

Income Limit —

Income threshold restricting IRA contributions.

Catch‑Up Contribution —

Extra retirement contributions allowed for people age 50+.

Rollover —

Moving retirement funds from one account to another without taxes.

Income Tax —

Tax on wages, salary, and other income.

Sales Tax —

Tax added to purchases at the point of sale.

Property Tax —

Annual tax on real estate value.

Tariff —

tax on imported goods.

Estate/Inheritance Tax —

Tax on assets transferred after death.

Payroll Tax —

Taxes for Social Security and Medicare taken from paychecks.

Gross Income —

Total income before any deductions.

Adjusted Gross Income (AGI) —

Income after above‑the‑line deductions.

Standard Deduction —

Fixed deduction amount reducing taxable income.

Itemized Deductions —

Specific expenses listed to reduce taxable income.

Tax Credit —

Dollar‑for‑dollar reduction of tax owed.

Refundable Tax Credit —

Credit that can reduce tax below zero and pay you the difference.

Non‑Refundable Tax Credit —

Credit that can reduce tax to zero but not below.

Above‑the‑Line Deduction —

Deduction taken before calculating AGI.

W‑2 —

Form showing wages and taxes withheld from an employer.

1099 —

Form for income earned as a contractor or freelancer.

1099‑INT —

Form showing interest, dividends, and investment income.