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22 Cards in this Set
- Front
- Back
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Tax Planning
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seeking legal ways to reduce, eliminate, or defer income taxes
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Taxable Income
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the income upon which income taxes are levied
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Taxes
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are compulsory charges imposed by the government on its citizens
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Progressive Tax
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requires a higher tax rate as income increases
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Regressive Tax
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demands a decreasing proportion of taxes on ones income
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Marginal Tax Bracket
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one of six income range segments at which income is taxed at an increasing rate
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Effective Marginal Tax Rate
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the total marginal rate reflects all taxes on a persons income including federal state and local income taxes as well as social security and medicare taxes
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Average Tax Rate
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proportion of total income paid in income taxes
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Total Income
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compensation from all sources
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Long Term Gains
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a profit or loss on the same of an asset that has been held for more than a year
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Short Term Gains
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a profit or loss on the sale of asset that has been help for more than a year
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Adjustments to Income
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are subtractions allowed for such things as IRA contributions, alimony paid, student loan interest paid
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Adjusted Gross Income
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is the result after subtracting adjustments from gross income
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Standard Deduction
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fixed amount that all tax payers may subtract from there adjusted gross income if they do not itemize their deductions
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Itemized Deductions
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tax deductible expenses
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Exemptions
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are based on the number of people supported by the taxpayers income
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Taxable Income
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the amount remaining after subtracting adjustments, deductions, and exemptions from your gross income
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Tax Credit
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dollar for dollar decrease in tax liability
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Final Tax Liability
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after subtracting your credits from your preliminary tax liability
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Tax Avoidance
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reducing tax liability through legal techniques
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Matching Contribution
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employer benefits that offer a full or matching contribution to a participating employees account in proportion to each dollar of contributions made by the participant
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Tax Sheltered Investments
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investments that yield returns that are tax advantaged
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