Taxes April 15 th ………... Tax Terms Withholdings money from paycheck that goes to prepay your...
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Transcript of Taxes April 15 th ………... Tax Terms Withholdings money from paycheck that goes to prepay your...
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Taxes
April 15th………..
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Tax Terms
Withholdings
money from paycheck that goes to prepay your federal income taxes
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Tax Terms
Payroll Taxes=based on employee total earnings
Income Taxes=taxes you pay on the income you receive
FICA=law requiring workers to contribute to social security and Medicare
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Tax Terms
Gross Income=amount your earn before taxes are withheld
Net Income=amount you receive after taxes are subtracted
Taxable Income=all wages, tips, and interest on which you pay taxes
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How Taxes Are Collected
Direct Taxes=paid directly to the government (property and income taxes)
Indirect Taxes=tax you pay that are included in the cost of a good or service
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Types of Tax
Taxes added to the price of goods and services at the time of purchase=sales tax
Taxes on the value of real estate property=property tax
Taxes collected on the sale of specific goods and services=excise tax
Example: Tobacco, gasoline, alcoholic beverages, firearms, oil products, and air travel. Unlike sales tax excise taxes are included in the price charged to the consumer
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Types of Tax
Taxes that are paid by the giver of gifts worth more than $13,000=gift tax
Taxes on goods that are harmful to yourself=sin tax
When a person dies, there may be an estate tax on the property which will be received by those legally entitled to the estate. Only estates that be higher than a certain amount are taxed
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Internal Revenue Service
An Agency that collects taxes. Taxes are due on April 15th
IRS=Internal Revenue Service
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TAX TIME
Tax Return=A set of forms that taxpayers
use to calculate their tax obligations
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Tax Time
All taxpayers must use one of the three basic forms of filing income taxes.
1040 Tax Form1040 A Tax Form1040 EZ
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1040EZ
Simplest of the income tax forms. Most often used by younger people with uncomplicated finances.
Taxable income below $100,000Single or Married Filing JointlyUnder 65No dependentsInterest income of $1,500 or less
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W-2 Form
Summary of your earnings and withholdings for the year
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W-4 Form
Provides info to your employer that determines the amount to withhold from your paycheck
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1099 INT
Statement of interest earned from your bank
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Tax Terms
Allowance=number that reduces amount of the money withheld from your paycheck. The more the allowances on your W-4 the less tax that is taken out each paycheck.
Dependents=the people you support financially
Deductions=any expenses you can legally subtract from your income when figuring your taxes