| A | B |
|---|
| Form W-4 | the Employee's Withholding Allowance Certificate is used to make allowances for tax withholding purposes |
| exempt | the status where the employer is instructed not to withhold federal income taxes from an employees wages |
| allowances | persons who are dependent on you for support and are claimed on your Form W-4 |
| Form W-2 | must be mailed by January 31 of the year following the year you were employed. Shows your total wages and withholdings while you were employed |
| Congress | determines the money in this country that is collected from citizens and redistributed according to priorities |
| revenue | money collected by the government from various sources |
| progressive taxes | kind of tax the increases in proportion to increases in income is this type of tax |
| taxable income | income the individuals earn that is subject to taxation |
| standard deduction | a flat amount that taxpayers can take depending on their filing status and subtracted from their gross income |
| deductions | expenses that can be subtracted from gross income |
| adjusted gross income | the amount remaining after subtracting things like retirement contributions from your gross income |
| gross income | the total income when all sources of income are added together |
| audit | an examination of a taxpayer's return by the IRS |
| itemize | listing each deduction you quality for |
| proportional taxes | tax is the same no matter your income--it's a percentage--property tax |
| regressive taxes | a consumption tax like sales tax--it takes a smaller share of income as your income grows |
| tax brackets | range from 10% - 37% based on your income |
| tax credit | an amount subtracted directly from the tax owed |
| tax evasion | willful failure to pay your taxes |
| The U.S. Government's largest source of revenue is | Federal Income Taxes |
| Other government taxes | inheritance/estate tax, excise taxes, import taxes |
| Ways IRS helps taxpayers | information, free booklets/pamphlets, website |
| Functions of the IRS | collect income tax, enforce tax laws, provide services to taxpayers |
| What do taxes pay for? | education, public areas, police/fire protection, highways, Congress salaries, national defense |
| What happens if you don't pay your taxes? | interest and penalties begin immediately, tax liens, collections calls, IRS levies, passport restrictions |
| When is the tax filing deadline? | April 15 of the following year |
| Why is it advisable to file your tax return early if you expect a tax refund? | You'll get your money faster! |
| What should you do if you find a mistake after filing your tax return? | file on time and pay as much as you can, contact IRS for a payment plan, borrow the money from someone or use a credit card or get a loan |
| If you file your taxes electronically how do you pay? | debit or credit card |
| voluntary compliance | all citizens are expected to prepare and file income tax returns |
| Form 1040 | The tax form Americans use to file 2018 taxes |
| standard deduction | a dollar amount that reduces the amount of income on which you are taxed and varies according to your filing status |
| 1099-INT or 1099-DIV | Form you receive showing the interest and dividends you received during the tax year |
| January 31 | The date by which your employer needs to send your total wages/withholding for the previous year (W2) |
| ability to pay principle | a commonly accepted concept of tax fairness that individuals with high income should pay more taxes than those with low income |
| If someone else prepares your tax return | you are responsible for any mistakes |
| You should save copies of tax returns for at least | three years |
| States with no state income tax | Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming |
| The choices of filing status are | single, head of household, married filing jointly, married filing separately, qualifying widow (er) with Dependent Child |
| dependent | a person who lives with you and receives more than 1/2 of his or her living expenses from you |
| Examples of income that are not taxes | child support, gifts |
| Example of an other forms of income that is taxable | gambling winnings, income from sale of property |
| 1040 Schedules | May need to be completed if certain deductions or credits are claimed or if additional taxes are owned |
| Always print a copy of your tax return | and save it |
| M1 | The tax form Minnesotans use to file 2018 taxes |
