Taxes April 15 th ………... Tax Terms Withholdings money from paycheck that goes to prepay your...
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Transcript of Taxes April 15 th ………... Tax Terms Withholdings money from paycheck that goes to prepay your...
Taxes
April 15th………..
Tax Terms
Withholdings
money from paycheck that goes to prepay your federal income taxes
Tax Terms
Payroll Taxes=based on employee total earnings
Income Taxes=taxes you pay on the income you receive
FICA=law requiring workers to contribute to social security and Medicare
Tax Terms
Gross Income=amount your earn before taxes are withheld
Net Income=amount you receive after taxes are subtracted
Taxable Income=all wages, tips, and interest on which you pay taxes
How Taxes Are Collected
Direct Taxes=paid directly to the government (property and income taxes)
Indirect Taxes=tax you pay that are included in the cost of a good or service
Types of Tax
Taxes added to the price of goods and services at the time of purchase=sales tax
Taxes on the value of real estate property=property tax
Taxes collected on the sale of specific goods and services=excise tax
Example: Tobacco, gasoline, alcoholic beverages, firearms, oil products, and air travel. Unlike sales tax excise taxes are included in the price charged to the consumer
Types of Tax
Taxes that are paid by the giver of gifts worth more than $13,000=gift tax
Taxes on goods that are harmful to yourself=sin tax
When a person dies, there may be an estate tax on the property which will be received by those legally entitled to the estate. Only estates that be higher than a certain amount are taxed
Internal Revenue Service
An Agency that collects taxes. Taxes are due on April 15th
IRS=Internal Revenue Service
TAX TIME
Tax Return=A set of forms that taxpayers
use to calculate their tax obligations
Tax Time
All taxpayers must use one of the three basic forms of filing income taxes.
1040 Tax Form1040 A Tax Form1040 EZ
1040EZ
Simplest of the income tax forms. Most often used by younger people with uncomplicated finances.
Taxable income below $100,000Single or Married Filing JointlyUnder 65No dependentsInterest income of $1,500 or less
W-2 Form
Summary of your earnings and withholdings for the year
W-4 Form
Provides info to your employer that determines the amount to withhold from your paycheck
1099 INT
Statement of interest earned from your bank
Tax Terms
Allowance=number that reduces amount of the money withheld from your paycheck. The more the allowances on your W-4 the less tax that is taken out each paycheck.
Dependents=the people you support financially
Deductions=any expenses you can legally subtract from your income when figuring your taxes