Standard 3- Taxes

Gross Income

the amount you earn before taxes and other payroll deductions

Net Income

what a person earns after payroll taxes and other deductions are taken out; often referred to as take-home pay​​​​​​​

Withholdings

the portion of an employee's pay held back to cover taxes and other deductions​​​​​​​

Fiscal Year

a one-year period that governments or companies use for financial reporting​​​​​​​

Deficit Spending

spending more than you earn; an economic policy in which the government spends public funds raised by borrowing rather than by taxation​​​​​​​

National Debt

the total amount of debt a country owes to companies and other countries as a result of deficit spending

Earned Income

any income (wages/salary) that is generated by the work someone performs

Wage

money paid by the hour and for an agreed number of hours per week; especially for unskilled or manual labor​​​​​​​

Minimum Wage

the smallest amount that employers can legally pay their employees per hour of work​​​​​​​

Salary

a fixed annual amount earned by an employee, typically paid weekly, biweekly, or monthly​​​​​​​

Passive Income

money earned on a regular basis with little or no effort required to maintain it​​​​​​​

Portfolio Income

income from an investment sold at a higher price than you paid for it ​​​​​​​

Paper Asset

a representation (on paper) of stocks, bonds, currencies, mutual funds, etc.

Income Tax

tax paid out by anyone who earns an income

Tax Bracket

the income ranges in which tax rates apply​​​​​​​

Tax Liability

the total tax a person or business has to pay​​​​​​​

Tax Return

a report that a taxpayer has to submit annually to the government and is used to determine a person's tax liability

Tax Day

the annual deadline for filing your income taxes; usually falls on April 15

Standard Deduction

the dollar amount people can subtract from their income before the tax is calculated

Tax Schedule

a special tax form to report certain types of income or deductions​​​​​​​

Itemized Deductions

a list of all eligible expenses that can be claimed to decrease taxable income​​​​​​​

Tax Credit

an amount of money a taxpayer can subtract from the taxes they owe ​​​​​​​

Audit

an official IRS inspection of a tax return to make sure the income and deductions are accurate

Wealth Tax

a tax based on the market value of owned assets

Property Tax

taxes paid by anyone who owns property, such as land, a home, or commercial real estate ​​​​​​​

Capital Gains Tax

a tax on the positive difference between the sale price and the value of a gift when it was inherited​​​​​​​

Inheritance Tax

a state tax on an asset an individual received from someone who has passed away​​​​​​​

Estate Tax

a tax that's imposed on a property owner's right to transfer the property to others after their death ​​​​​​​

Gift Tax

a tax on any asset that exceeds the yearly amount you can transfer to another person without compensation of equal value

Consumption Tax

a tax on the purchase of goods or services in the form of sales tax, excise tax, and other special taxes

Sales Tax

a tax on goods and services that goes to a state or local government ​​​​​​​

Excise Tax

a tax on certain goods that aren't typically considered a necessity; sometimes called a luxury tax

IRS

The government body that carries out the federal tax system

Social Security (SS)

Provides payments to eligible retirees and disabled people

Medicare

Provides health care coverage to mostly older Americans and some younger disabled people