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Income and taxes
| Question | Answer |
|---|---|
| Biweekly | a periodical that appears 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 | For the year you are filing, earned income includes all income from employment, but only if it is includable in gross income. Examples of earned income are: wages; salaries; tips; and other taxable employee compensation. Earned income also includes net ea |
| 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 | The federal income tax is the tax levied by the Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts, and other legal entities. Federal income taxes are applied to all forms of earnings that make up a taxpayer's taxab |
| FICA | FICA is a U.S. federal payroll tax. It stands for the Federal Insurance Contributions Act and is deducted from each paycheck. |
| Fringe Benefits | an extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance, etc. |
| Gross income | Gross income represents the total income from all sources, including returns, discounts, and allowances, before deducting any expenses or taxes. |
| Hourly wages | Hourly pay is pay that a person earns based on a set hourly rate. This rate is then multiplied by how many hours the person works in a pay period, usually one or two weeks at a time. For example, if you make $10 an hour and work 30 hours a week, you'd mak |
| Income tax | tax levied by a government directly on income, especially an annual tax on personal income. |
| Medicare tax | Medicare tax, also known as “hospital insurance tax,” is a federal employment tax that funds a portion of the Medicare insurance program. Like Social Security tax, Medicare tax is withheld from an employee's paycheck or paid as a self-employment tax. 1 |
| Net income | Net income, also called net earnings, is sales minus cost of goods sold, general expenses, taxes, and interest. |
| Overtime pay | The federal overtime provisions are contained in the Fair Labor Standards Act (FLSA). Unless exempt, employees covered by the Act must receive overtime 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 | Sales commission is the percentage of the value of a sale that a sales associate or sales representative may earn. Variable costs include your cost of goods |
| Social security tax | Social Security tax is the tax levied on both employers and employees to fund the Social Security program in the U.S. Social Security tax is collected in the form of a payroll tax mandated by the Federal Insurance Contributions Act (FICA) or a self-employ |
| Tax deduction | A tax deduction is a deduction that lowers a person's or an organization's tax liability by lowering their taxable income |
| Tips | Treasury Inflation-Protected Securities, or TIPS, provide protection against inflation. The principal of a TIPS increases with inflation and decreases with deflation, as measured by the Consumer Price Index. When a TIPS matures, you are paid the adjusted |
| W2 forms | Form W-2, also known as the Wage and Tax Statement, is the document an employer is required to send to each employee and the Internal Revenue Service (IRS) at the end of the year. A W-2 reports employees' annual wages and the amount of taxes withheld from |
| W4 forms | Form W-4 is an Internal Revenue Service (IRS) tax form that is filled out by employees to indicate their tax situation to their employer. The W-4 form tells the employer the amount of tax to withhold from an employee's paycheck based on their marital stat |
| Withholding | Withholding is the portion of an employee's wages that is not included in their paycheck but is instead remitted directly to the federal, state, or local tax authorities. Withholding reduces the amount of tax employees must pay when they submit their annu |
Created by:
Dmiller231
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