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Income and Taxes
| Term | Definition |
|---|---|
| Bi Weekly | appearing or taking place every two weeks or twice a week. |
| Dependent | requiring someone or something for financial, emotional, or other support. |
| Direct Deposit | the electronic transfer of a payment directly from the account of the payer to the recipient's account. |
| Earned Income | income derived from active participation in a trade or business, including wages, salary, tips, commissions and bonuses. |
| Employee | a person employed for wages or salary, especially at nonexecutive 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 tax levied by the IRS on the annual earnings of individuals, corporations, trusts and other legal entities. Federal income taxes are applied on all forms of earnings that make up a taxpayer's taxable income, such as employment earnings or capital gains. |
| FICA | Federal Insurance Contributions Act tax is a United States federal payroll tax imposed on both employees and employers to fund federal programs that provide benefits for retirees, the disabled, and children of deceased workers. |
| Fringe Benefits | 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 regular payment, usually on an hourly, daily, or weekly basis, made by an employer to an employee, especially for manual or unskilled work. |
| Income Tax | tax levied by a government directly on income, especially an annual tax on personal income. |
| Medicare Tax | A tax deducted from employees' paychecks that goes to pay for medical benefits for people over 65 years of age. Medicare tax is paid by both employee and employer. |
| Net Income | Net Income is a company's total earnings, is calculated by taking revenues and subtracting the costs of doing business such as depreciation, interest, taxes and other expenses. |
| Overtime Pay | Additional financial compensation for any hours worked by nonexempt staff over the amount of forty hours per week. |
| 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 | additional compensation the employee receives for exceeding expectations. |
| Social Security Tax | the tax levied on both employers and employees used to fund the Social Security program. The Social Security tax pays for the retirement and disability benefits. |
| Tax Deduction | 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 | a service professional earns that is not part of a regular wage. |
| W2 Form | is the form that an employer must send to an employee and the Internal Revenue Service (IRS) at the end of the year. The W-2 form reports an employee's annual wages and the amount of taxes withheld from his or her paycheck. |
| W4 Form | to indicate his tax situation to the employer. ... A change in status can result in the employer withholding more or less tax. |
| 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:
Makhdar17
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