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Income and Taxes
| Term | Definition |
|---|---|
| Biweekly | appearing or taking place every two weeks or twice a week. Paid every two weeks. |
| Dependent | a person who relies on another, especially a family member, for financial support |
| Direct deposit | the electronic transfer of a payment directly from the account of the payer to the recipient's account. |
| Earned Income | money derived from paid work. |
| Employee | a person employed for wages or salary, especially at nonexecutive level. |
| Employer | a person or organization that employs people |
| Exemptions | the process of freeing or state of being free from an obligation or liability imposed on others. |
| Federal Income Tax | A tax levied by the United States Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts and other legal entities. |
| FICA | Federal Insurance Contributions Act tax is a United States federal payroll tax imposed on both employees and employers to fund Social Security and Medicare |
| Fringe Benefits | an extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance, etc. |
| Gross Income | An individual's total personal income before taking taxes or deductions into account. |
| Hourly Wage | a rate an employer agrees to pay a worker per hour worked |
| Income Tax | tax levied by a government directly on income, especially an annual tax on personal income. |
| Medicare Tax | Employee and Employer pay 1.45 percent |
| Net Income | an entity's income minus cost of goods sold, expenses and taxes for an accounting period. |
| Overtime pay | hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay. |
| Profit Sharing | a system in which the people who work for a company receive a direct share of the profits. |
| Salary | a fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee, especially a professional or white-collar worker. |
| Sales Commission | A commission may be paid in addition to a salary or instead of a salary. |
| Social Security Tax | The tax levied on both employers and employees used to fund the Social Security program. |
| Tax Deduction | Tax deduction is a reduction of income that is able to be taxed. |
| Tips | To receive an amount of money for your work. |
| W2 Form | The form that an employer must send to an employee and the Internal Revenue Service (IRS) at the end of the year |
| W4 Form | completed by an employee to indicate his or her tax situation (exemptions, status, etc.) to the employer. |
| Withholding Allowance | Employee-claimed exemptions on the tax form employers use to determine how much of an employee's pay to subtract from his or her paycheck to remit to the tax authorities. |
Created by:
mfeldmann16
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