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26 Cards in this Set
- Front
- Back
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Progressive Tax |
A tax system in which tax rates increase as income increases |
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Personal Exemptions |
A IRS-allowed reduction in your income tax for yourself, your spouse and any dependents that is subtracted before you compute your taxes |
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Total Income |
Another name for gross income |
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Capital Assets |
Assets you own, including such items as stocks, bonds, or real estate |
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Bracket Creep 2 |
Bubba was given a cost of living raise and merit raise at work. His federal income was paid at 25% instead of 15%. Bubba has experienced |
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Personal or Dependency Exemptions |
Claiming yourself, your spouse and/or grandparents that you support |
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Passive Income |
Comes from activities in which the taxpayer does NOT actively participate |
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FICA |
Deductions from your paycheck are for which mandatory federal insurance programs such as Medicare and Medicaid |
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Deductions |
Expenditure that are subtracted in an effort to calculate lowest possible taxable |
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Deductions 2 |
Expenditure that are subtracted in an effort to calculate lowest possible taxable income
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Capitol Loss |
Felix sold his stock in GSK corporation for a price less than he paid for |
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Form 1040x |
If you made a mistake, an amended tax return may be filled out on this form |
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Excise Taxes |
Imposed on items such as alcohol and cigarettes, sometimes called sin taxes, and are often aimed at reducing consumption of these items |
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Tax-Deferred |
Income on which the payments of taxes is postponed until some further date |
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Active Income |
Income that comes from wages or a business |
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Tax Filers |
Individuals whose income meets federal guidelines must file a federal income tax return |
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Tax Credit |
Offsets your tax liability in a direct dollar for dollar manner and may actually increase your tax refund beyond the amount paid during the tax year |
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IRS Collection Mechanisms |
Paycheck with holding, quarterly estimated payments and payments submitted with tax returns |
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Capital Gain Math |
Purchase price per share x share price = basis Sale price less basis = gain |
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IRS Tax Audit |
Reasons include random selection, past audits or suspicious items on a return |
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Child Tax Return |
Reduces the federal income tax you owe by up to $1,000 for each qualifying child under 17 |
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Earned Income Credit |
Serves as a negative income tax and is available to low income tax payers |
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April 15th |
The deadline to file your income tax return although an automatic extension may be filed |
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Bracket Creep |
The movement into a higher tax bracket as a result of inflation increasing wages |
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Marginal Tax Rate |
The percentage of the last dollar you earn that goes toward your taxes |
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W-4 Adjustment |
Used to claim deductions and put an end to with holding |
