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Vocab Chapter 7
Personal Finance
| Term | Definition |
|---|---|
| taxable income | the income on which you will pay tax |
| tax credit | an amount subtracted directly from the tax owed |
| standard deductions | a stated amount that you may subtract from adjusted gross income instead of itemizing your deductions |
| itemized deductions | expenses you can subtract from adjusted gross income to determine your taxable income |
| gross income | all the taxable income you receive |
| filing status | describes your tax-filing group, which is based on your marital status as of the last day of the tax year |
| exemption | an amount you may subtract from your income for each person who depends on your income to live |
| dependent | a person who lives with you and for whom you pay more than half his or her living expenses |
| adjusted gross income | the amount left after these adjustments are subtracted from gross income |
| voluntary compliance | all citizens are expected to prepare and file tax returns of their own accord without force |
| tax evasion | willful failure to pay taxes |
| tax brackets | income tax ranges from 10 to 35 percent based on income |
| revenue | incoming funds to the government |
| audit | an examination of tax returns |
| proportional taxes | taxes for which the rate stays the same, regardless of income (property taxes, gasoline tax, sales tax) |
| progressive taxes | take a larger share of income as the amount of income grows (income tax) |
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holly107roberts
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