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Chapters 2 & 3

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Question
Answer
Audit   An examination of income tax returns by the IRS.  
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Benefits   Forms of employer compensation in addition of pay.  
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Dividends   Money paid to stockholders from the corporations earnings.  
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Exemption   An amount you may subtract from your income for each person who depends on your income to live.  
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Filing Status   Your tax-filing group based on your marital status as of the last day of the tax year.  
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Gross Pay   All of the taxable income you receive during the year.  
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Net Pay   The amount left after all deductions are taken from a employee's gross pay.  
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Progressive Tax   A tax that takes a larger share of one's income as the amount of income grows.  
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Proportional Tax   A tax for which the rate stays the same regardless of one's income.  
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Regressive Tax   A tax that takes a smaller share of one's income as the amount of income grows.  
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Salary   A fixed annual amount of gross pay.  
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Tax Bracket   An income range that a tax rate is applied to.  
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Tax Credit   A reduction of taxes owed.  
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Tax Liability   The amount of total tax you owe in a year's income.  
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Union   A group of people who work in the same or similar occupations, organized for the benefits of the employees in the occupations.  
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Wage   A fixed hourly rate earned by employees.  
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