| A | B |
|---|
| tax liability | the total amount of taxes owed |
| estate tax | a federal tax collected on the value of a person's property at the time of his or her death |
| inheritance tax | a state tax collected on the property left by a person to his or her heir(s) in a will |
| income tax | taxes on wages, salaries, and self-employed earnings |
| income tax return | a form on which a taxpayer reports how much money he or she received from working |
| exclusion | income that is not subject to tax |
| adjusted gross income | gross income after certain reductions are calculated |
| taxable income | adjusted gross income less any allowable tax deductions and exemptions |
| tax deduction | an expense that you can subtract from your adjusted gross income to figure your taxable income |
| standard deduction | an amount of money set by the IRS that is not taxed |
| itemized deduction | a specific expense that you deduct from your adjusted gross income |
| exemption | a deduction from adjusted gross income for the taxpayer, the spouse, and qualified dependents |
| tax credit | an amount of money that can be subtracted directly from taxes you owe |
| allowance | an adjustment to the tax withheld from your paycheck, based on your marital status and whether you have dependents |
| extension | an extended deadline for filing an income tax return |
| tax audit | a detailed examination of your tax return by the IRS |
| Net Pay | he amount of money left after all deductions have been withheld from the gross pay |
| Personal Information | states the employee’s full name, address, and Social Security number |
| Gross Pay | the total amount of money earned during a pay period before deductions |
| Medicare | nation’s health care program for the elderly and disabled |
| Deductions | the amount of money subtracted from the gross pay earned for mandatory taxes, |
| Federal Withholding Tax | the percentage deducted from an individual’s paycheck to assist in funding |
| Pay Period | the length of time for which an employee’s wages are calculated |
| FICA | this tax includes two separate taxes: Fed OASDI/EE or Social Security and Fed |
| Social Security | Nation’s retirement program, helps provide retirement income for elderly |
| Taxes | mandatory charges imposed on citizens by local, state, and federal governments. |
| IRS | Collects federal taxes, and enforces tax laws written by the United States |
| State Withholding Tax | the percentage deducted from an individual’s paycheck to assist in funding |
