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Income and Taxes
| Term | Definition |
|---|---|
| Biweekly | appearing or taking place every two weeks or twice a week |
| Dependent | is a person who relies on another as a primary source of income |
| Direct Deposit | the electronic transfer of a payment directly from the account of the payer to the recipient's account |
| Earned Income | is a refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children |
| Employee | a person employed for wages or salary, especially at nonexecutive level |
| Employer | person or organization that employs people |
| Exemptions | the process of exempting a person from paying taxes on a specified amount of income for themselves and their dependents |
| 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 (abbreviation and definition) | Federal Insurance Contributions Act-is a United States federal payroll (or employment) tax imposed on both employees and employers to fund Social Security and Medicare |
| Fringe Benefits | a form of pay for the performance of services |
| Gross Income | the starting point for determining Federal and state income tax of individuals, corporations, estates and trusts, whether resident or nonresident. |
| Hourly Wage | 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 | Tax deducted from the wages of every legally working American that is used to pay for the Medicare program |
| Net Income | an entity's income minus cost of goods sold, expenses and taxes for an accounting period |
| Overtime Pay | Unless exempt, employees covered by the Act must receive overtime pay for 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 | 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 Commissions | A commission is generally a percentage of the sales price of an item |
| Social Security Tax | The tax levied on both employers and employees used to fund the Social Security program. Social Security tax is usually collected in the form of payroll tax or self-employment tax |
| Tax Deduction | Tax deduction is a reduction of income that is able to be taxed, and is commonly a result of expenses, particularly those incurred to produce additional income |
| Tips | To receive money for your service |
| 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 | A form completed by an employee to indicate his or her tax situation (exemptions, status, etc.) to the employer. The W-4 form tells the employer the correct amount of tax to withhold from an employee's paycheck |
| 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:
jpearl16
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