| A | B |
|---|
| revenue | money government collects from citizens |
| progressive tax | tax that takes larger share of income as amount grows |
| regressive tax | tax that takes smaller share of income as amount grows |
| proportional tax | tax in which rate stays same, regardless of income |
| internal revenue service | agency that collects income taxes and enforces tax laws |
| tax bracket | income ranges to which tax rates apply |
| tax evasion | willful failure to pay taxes |
| audit | examination of tax return |
| correspondence audit | IRS sends letters asking for evidence |
| field audit | IRS sends agent to verify tax information |
| filing status | options that describe you on tax return (ex: single, married filing jointly) |
| exemption | amount you may subtract from income for each person who depends on your income to live |
| gross income | all taxable income you receive, including wages, tips, salaries, interest, dividends to name a few |
| child support | money paid to former spouse for support of dependent children |
| alimony | money paid to support former spouse |
| adjusted gross income | result of adjustments subtracted form gross income |
| deductions | expenses the law allows you to subtract from your adjusted gross income |
| itemize | list your allowable expenses on tax return |
| standard deduction | stated amount you may subtract from adjusted gross income instead of itemizing |
| taxable income | income on which you will pay tax |
| tax credit | amount subtracted directly from tax owed |
