Taxes April 15 th ………..

Tax Terms Withholdings money from paycheck that goes to prepay your federal income taxes

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

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

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

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

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

Internal Revenue Service An Agency that collects taxes. Taxes are due on April 15 th IRS=Internal Revenue Service

TAX TIME Tax Return=A set of forms that taxpayers use to calculate their tax obligations

Tax Time All taxpayers must use one of the three basic forms of filing income taxes Tax Form 1040 A Tax Form 1040 EZ

Simplest of the income tax forms. Most often used by younger people with uncomplicated finances. Taxable income below $100,000 Single or Married Filing Jointly Under 65 No dependents Interest income of $1,500 or less

W-2 Form Summary of your earnings and withholdings for the year

W-4 Form Provides info to your employer that determines the amount to withhold from your paycheck

1099 INT Statement of interest earned from your bank

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