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Income and Taxes
| Term | Definition |
|---|---|
| biWeekly | appearing or taking place every two weeks or twice a week |
| 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 non executive level. |
| Employer | a 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 federal income tax is 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 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 accounting for taxes or deductions. |
| Hourly Wage | a rate an employer agrees to pay a worker per hour worked, such as $12 per hour or $17.50 per hour. |
| Income Tax | tax levied by a government directly on income, especially an annual tax on personal income. |
| Medicare Tax | The Medicare payroll tax is 2.9%. It applies only to earned income, which is wages you are paid by an employer, plus tips. |
| Net Income | is an entity's income minus cost of goods sold, expenses and taxes for an accounting period. |
| 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 | 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 Commissions | additional compensation the employee receives for exceeding expectations. |
| Social Security Tax | The current tax rate for social security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. |
| Tax Deduction | The current tax rate for social security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. |
| Tips | a sum of money given to someone as a reward for their services |
| W2 Form | form that an employer must send to an employee and the Internal Revenue Service (IRS) at the end of the year. |
| W4 Form | or an Employee's Withholding Allowance Certificate, to indicate his tax situation 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:
cprosneick17
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