Taxes Personal Finance – Flashcards
Unlock all answers in this set
Unlock answersquestion
FICA
answer
Federal Insurance Contributions Act Tax
question
FICA shows up on paychecks as?
answer
social security and medicare
question
Half is paid by the _____ unless you are _____.
answer
employer self employed
question
Social security
answer
provides benefits for retirees, the disabled, and children of decreased workers
question
Medicare
answer
provides health insurance for Americans aged 65 and older who have worked and paid into the system. Federal Government
question
Loan Deferment
answer
allows you to put off making payments
question
What about interest for loan deferment
answer
Interest still accumulates and compounds during this time
question
Federal Income Tax
answer
US government Used for healthcare, job and family security, Net interest, Education, job training
question
States Income Tax
answer
State government Used for K-12 Education, health care, higher education, programs and services
question
Local Income Tax
answer
City or county Used for parks, local interstates, schools
question
Gross Pay
answer
Amount you earn in a pay period
question
Net Pay. Also known as take home pay
answer
amount pay you have left after deduction for taxes and benefits payments have been taken out
question
Deductions
answer
all of the different items that are taken from your gross pay.
question
Benefits
answer
all of the extra items that are provided by employers that may or may not show up on a paycheck
question
Mandatory Paycheck Deductions
answer
-Federal, state and local taxes -Social Security tax -Medicare tax
question
Optional Paycheck Deductions
answer
- Life, Health, optical, dental, long-term disability, insurance -Retirement savings -Charity
question
Salary
answer
You are contracted to do work for a set amount of money.
question
Hourly Wage
answer
you are paid on amount for each hour you work
question
Overtime Pay
answer
extra pay for working beyond the normal work day or week. 40 hours a week -1.5 times regular rate -2 times regular rate
question
Holiday Pay
answer
may be paid more for working during a holiday
question
Shift Bonus
answer
weekend or night bonus
question
Commission
answer
usually for sales people -percentage -May be combined with a base salary
question
Tips
answer
may make below minimum wage and you will get paid by the people you serve to increase their earnings.
question
Pieceworkers
answer
paid by the number of items produced
question
Pay Periods
answer
- You may not get paid on Friday of your first week of work. - Could be 2-3 weeks- add this time onto your emergency fund
question
Ways to be Paid
answer
- weekly divide by 52 -Every other week 26 paychecks per year divide by 26 - Bi-monthly or semimonthly 24 paychecks per year divide by 24 - Monthly 12 paychecks per year divide by 12
question
Labor Laws
answer
-US Department of Labor -wages -Hours -Unemployment
question
How much you like your job...
answer
How much you like your job impacts your health and happiness
question
What do I do if I owed a lot of taxes last year?
answer
Fill out new W-4 and claim fewer exemptions
question
What do I do if I had really large refunds last year?
answer
Fill out new W-4 and claim more exemptions if possible- cannot lie that you have dependents
question
What do I do if I get married or have a child?
answer
Fill out a new W-4
question
Tax Credits
answer
Items that will reduce the amount of tax that you owe
question
Marginal Tax Rate. Also known as the tax bracket
answer
The highest federal tax rate that you pay
question
Progressive Tax Rate
answer
Not all income is taxed at the same rate
question
IRS
answer
Internal Revenue Service -federal government agency __that collects__ taxes and enforces tax laws
question
Form W-4
answer
Employees withholding allowance certificate -Determines how much __federal tax__ is __withheld__ from your paycheck
question
W-2 - wage and tax statement
answer
A form sent to you by your employer __by January 31__ of the following year that tells __how much you made and how much was taken out for taxes__ -4 copies
question
W-2 Informational
answer
-Name and address -Social Security Number - Total Income -Federal Tax Withheld -State Tax Withheld -Local Tax Withheld -Social Security Tax Withheld
question
1040 EZ- Federal tax form
answer
-Single or married filling a joint return -No dependents -Taxable income of $100,000 or less -Interest income of $1,500 or less -All income must be from wages, salaries, or tips (or interest of $1,500 or less)
question
1099-int
answer
__Federal__ form that you receive from your __bank__ that shows how much __interest __ was paid to you from the previous year
question
Taxable Income
answer
The amount of your income that you pay tax on -Line 6 on 1040 EZ
question
Standard Deduction
answer
The amount of money that everyone gets to deduct from their income to arrive at taxable income
question
Personal Exemption
answer
The amount that you can deduct from your total income to arrive at taxable income if no one else claims you (Federal Tax Form)
question
Tax audit
answer
Where the IRS randomly selects people to inspect their returns
question
Medicaid
answer
Insurance program run through the state government in order to give insurance to people with low incomes.
question
Property tax
answer
annual amount paid by a land owner to the local government or the municipal corporation of his area - value of the home X% of Tax= Property Tax owed
question
Sales Tax
answer
A tax on sales or on the receipts from sales
