Consumer Economics Review

Where do the funds for Social Security originally come from?

Both Employers and Employees

The Federal Government uses taxes for the the following

Military - National Defense, Public Services - like Medicare and Medicaid, and Interest and Payments on the National Debt

A characteristic of Taxable Income is

It is always lower than gross income, It is used to find Tax Liability, The dollar amount you look up in the tax table

What is a progressive income tax system?

a tax system that taxes higher income at higher rates and lower income at lower rates

Which form tells your employer all they need to know about your tax-related allowance information and you must fill out when you get a job?

W-4

Which of the following is Wages and Withholding statement you should receive from your employer by the end of January?

W2

Examples of Unearned income are: (multiple answer)

Interest from your bank, Capital gain from an asset, Winnings on a game show, and Dividends

An example of a Regressive Tax is: (Mark all that apply)

Sales Taxes and Paying $2.00 Toll

This is how you pay your Federal Income taxes.

Pay-as-you-go basis and Through Federal Tax Withholdings

What incomes will pay the exact same amount of money to Social Security? (mark all that apply)

$140,000 and $150,000

Filing which number on the W-4 will deduct the most amount of money from your paycheck, which could mean a refund when you file your tax forms by April 15.

0

What  pays for health care for individuals aged 65 and older?

Medicare

Net Pay/Income is

income after all payroll deductions

What does the Federal Government use taxes for?

Pay national debt, The military, and Education

The main differences between a Tax Deduction and a Tax Credit is

A Tax Deduction reduces taxable income while a Tax Credit reduces Tax Liability and A Tax Credit has a more direct effect on the actual amount of taxes paid, while a Tax Deduction will decrease Taxable Income which will ultimately decrease Tax Liability

Taxable Income

Taxable income is the portion of your income that is subject to taxation by the government.

Unearned income

Unearned income refers to money received that isn't earned through work or active participation in a business

Regressive Tax

A regressive tax is a type of tax where the tax rate decreases as the taxpayer's income increases