| A | B |
|---|
| FICA | Federal Insurance Contributions Act; money withheld from a paycheck that is contributed to Social Security. |
| Excise tax | a consumption tax imposed on a specific product or activity. |
| Flat tax | aka Proportional tax; a tax for which the percentage of income paid in taxes remains the same at all income levels. |
| Progressive tax | a tax for which the percentage of income paid in taxes increases as the income increases. |
| Regressive tax | a tax for which the percentage of income paid in taxes decreases as income increases. |
| Tax deduction | an expense you are allowed to deduct from your income before you determine your tax bracket. |
| Tax credit | an amount that taxpayers may subtract from the total amount of their income tax. |
| 1040 form | income tax form to be turned in to IRS by April 15th every year. |
| Fiduciary | person or organization that has a legal and ethical obligation to act in the best interests of another person or client. |
| Intestate | dying without leaving a legally valid will. |
| Executor | a person named in a will to manage a deceased person's financial affairs and carry out their final instructions. |
| Beneficiary | the person who collects the money if there is a claim on an insurance company. |
| Right of survivorship | a legal rule that lets a surviving owner automatically take over a dead co-owner’s share of an asset. |
| Will | a legal document providing instructions on how to distribute a person’s assets after death. |
| Executor | a person named in a will to manage a deceased person's financial affairs and carry out their final instructions. |
| Trust | a legal arrangement that gives a person or a group of people the right to hold and manage specific assets; also an illegal grouping of companies that discourages competition. |
| Joint tenancy | a legal arrangement where two or more people own a property or asset together with equal shares and the right of survivorship. |
| Probate | the official court-supervised process of validating a deceased person's will and administering their estate. |
| Audit | an examination of income tax returns by the IRS. |
| Revenue | the income received by a government from taxes and other nontax sources. |
| Tax | money paid to the government so the government can pay for public services. |
| Tax bracket | a level of income that determines the percentage of tax you will pay. |
| Tax evasion | a federal crime of failing to pay taxes. |
| Voluntary compliance | a system in which all citizens prepare and file tax returns on their own. |
| Adjusted gross income | gross income less adjustments. |
| Estimated tax | the amount of tax you estimate you will owe on income received without withholdings. |
| Exempt status | available only to those who know they will not earn enough in one year to owe income tax. |
| Exemption | an amount you may subtract from your income for each person who depends on your income to live. |
| Filing status | your tax-filing group based on your marital status as of the last day of the tax year. |
| Gross income | aka gross pay; your pay before withholdings. |
| Itemized deductions | expenses you can subtract from adjusted gross income to determine your taxable income. |
| Tax liability | the amount of total tax you owe on a year’s income. |
| Taxable income | the earnings on which taxes must be paid; total income minus exemptions and deductions. |
