| A | B |
|---|
| 1040 | standard IRS form that individuals can use to file their annual tax returns |
| 1099 | Form that details all "non-employee" compensation including money for specific jobs like freelancers or contractors |
| allowances | employee claimed exemptions on the W-4 to determine how much of an employee's pay to withhold for taxes |
| audit | an inspection of the filer's tax return by the IRS |
| dividend | money from the profits of a company that is paid out to its shareholders |
| effective tax rate | the actual rate you pay on your taxes as a percentage of your overall income |
| excise tax | a tax paid on purchases of a specific good, like gas or cigarettes |
| filing status | category that defines the type of tax return an individual will use, primarily based on marital status; it also determines the size of your tax brackets and how much your income is taxed at each bracket |
| FICA | federal law that requires an employer to withhold tax from the wages of employees for social security and medicare |
| interest income | income earned through earnings on savings, CDs, bonds, etc. |
| medicaid | government run insurance program that provides healthcare assistance to low income Americans |
| medicare | government run insurance program that provide healthcare assistance to elderly and disabled Americans |
| payroll tax | federal and state taxes that all employers must pay, based on a percentage of the employees salary, toward social services such as SS and Medicare |
| Social Security | federal program that provides monthly benefits to millions of retirees and disabled Americans |
| Standard Deduction | dollar amount that reduces your taxable income,for individuals who do itemize their deductions |
| taxable income | the amount of income that is used to calculate an individuals income tax due |
| tax bracket | a range of income amounts that are taxed at a particular rate |
| W-2 | the percentage at which taxes are paid on each dollar of income |
