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Taxes Flash Cards
Econ taxes Chap 8
52
Economics
11th Grade
05/08/2011

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Term
Ability to Pay
Definition
A concept of tax fairness that people with different amount of wealth/income should pay taxes at different rates.
Term
Adjusted Gross Income
Definition
Total income reduced by certain amounts: Payments to a traditional IRA or student loans
Term
Benefits Recieved
Definition
A concept of tax fairness that peopel should pay taxes in proportion to the benefits they revieve from government goods/services
Term
Business Taxes
Definition
Taxes given to government run corporations. Includes unemployment insurance, workmens compenssation, social security contributions and Medicare
Term
Credits
Definition
A direct reduction of tax owned. Allowed for child care expenses, higher education costs, qualifying children and earned income of low-income taxpayers
Term
Dependent
Definition
A person who relies on someone else for support. The supporter can claim exemptions for the person. Cannot be themself or a spouse.
Term
Direct Tax
Definition
A tax that cannot be shifted to others. For example, federal income tax.
Term
Dividends
Definition
A corporations distributions to its shareholders from its earning and profits
Term
Earned Income
Definition
Wages, salaries, tips and net earnins from self employment and other income reveived for personal services
Term
Earned Income Credit
Definition
A credit that can be paid to low income workers. Have to fill out a tax return
Term
IRS e-File
Definition
The quickest and easiest way to file your taxes. Twice as fast as paper. And online
Term
Excise Taxes
Definition
Taxes on the sale or use of specific products or transactions
Term
Exempt(from witholding)
Definition
Freedom from witholding of federal income tax. Does not free you from paying other taxes like social security
Term
Exemption(Personal or dependency)
Definition
Amount that taxpayers can claim for themselves, their spouses and eligible dependents.
Term
Federal/State e-File
Definition
Program sponsored by the IRS in partnership with participating states that allow the taxpayers to files federal and state income tax returns electrically
Term
File a return
Definition
When a taxpayer mails or transmits their information regarding income and tax liability in a specific format to the IRS.
Term
Filing Status
Definition
Tax bracket that a taxpayer is placed in. Based on marital status and other factors
Term
Form W-4
Definition
A.K.A (Employees withholding Allowance Certificate). A form for an employer that helps determine how much they should deduct from their paycheck regarding federal income tax
Term
Formal Tax Legislation Process
Definition
The steps that a proposed tax law must pass through before it becomes law (Congress and the President)
Term
Gross Income
Definition
Money, goods and property you recieved that must generally be reported on a tax return. May be included in your taxable income too
Term
Horizontal Equity
Definition
Concept that people in the same income group should be taxed at the same rate
Term
Income Taxes
Definition
Taxes on income, both earned and unearned. Can be given to business and individuals
Term
Indirect Tax
Definition
A tax that can be shifted to others, such as a business property taxes
Term
Informal Tax Legislation Process
Definition
Individuals and interest groups expressing and promoting their opinions about tax legislation
Term
Interest Income
Definition
Income a person revieves from certain financial accounts or from lending money to someone else
Term
Payroll Taxes
Definition
Taxes collected from employers and employees to finance specific programs
Term
Personal Income Tax
Definition
A tax based on the amount of taxable income that people receive anually.
Term
Progressive Tax
Definition
A tax that takes a larger percentage of income from high income groups than low income groups
Term
Property Tax
Definition
Taces on property, especially real estate. Can be applied to boats, automobiles and business inventories
Term
Proportional Tax (Flat Tax)
Definition
A tax that takes the same percentage of income from all income groups
Term
Public Goods and Services
Definition
Government provided things that we pay taxes for. National Defense, welfare, street lights, roads, trade regulation and education
Term
Redevelopment or Enterprise Zone
Definition
A government designated area that is declared "in need of restoration and revitalization"
Term
Regressive Tax
Definition
A tax that takes a larger percentage of income from low income groups than high income groups
Term
Sales Tax
Definition
Taxes on retail products, based on a set of percentage of retail costs
Term
Schedule
Definition
A form on which taxpayers report details about an item summarized on the general return form?
Term
Standard Deduction
Definition
An amount provided by law that taxpayers can deduct from their adjusted gross income tax. Based on age, blindness, filing status and dependency
Term
Tariff Duty
Definition
Taxes on products imported from foreign countries.
Term
Tax Credits
Definition
Amounts that can be deducted directly from taxes owed.
Term
Tax Deductions
Definition
A part of a person’s or a business total expenditures that can be subtracted in determining taxable income
Term
Tax Exemptions
Definition
A part of a person's total income on which no tax is imposed
Term
Tax Liability
Definition
The amount of tax that must be paid.
Term
Tax Shift
Definition
The process that occurs when a tax that has been imposed on one person or group is paid by others
Term
Tax Withholding
Definition
Money that an employer holds back from an employee's pay that is used to pay part or all of the employee’s taxes
Term
Taxable Income
Definition
The income on which tax is figured
Term
Taxes
Definition
Required payments of money to governments that are used to provide public goods and services for the benefit of the community as a whole
Term
Tele File
Definition
Filing returns over a touch-tone phone.
Term
Transaction Taxes
Definition
Taxes on economic transactions, such as the sale of goods and services.
Term
Unearned Income
Definition
Income other than wages from work performed. (Interest and dividend from savings or investments)
Term
Vertical Equity
Definition
The concept that people in different groups should pay different rates of taxes. or different rates of their income as taxes
Term
Voluntary Compliance
Definition
A system of compliance that relies on individual citizens to report their income freely and voluntarily.
Term
Withholding
Definition
Money that employers take away from employees paychecks. This money is withdrawn for certain government taxes.
Term
Withholding Allowance
Definition
Claimed by an employee on Form W-4. An employer uses the number of allowance claimed with income earned and marital status to determine how much to withhold from wages.
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