Paying Taxes

Paying Taxes

Term Definition
1040EZ The quick tax form most often used for those with uncomplicated tax situations.
1099INT Report on interest income sent from the bank to both the IRS and the taxpayer for savings account interest.
FICA The Federal Insurance Contributions Act, the name given to Social Security and Medicare taxes. The employee pays some of the FICA tax, and the employer pays some of this tax for each employee.
Standard Deduction The deduction allowed for those not claimed as a dependent on a parent’s taxes.
Tax Deduction A donation or expense that reduces the taxable income amount.
Tax Refund A check returning the taxpayer’s money to the taxpayer after returns are filed and the overpaid tax is determined.
W2 Report sent from the employer to both the IRS and the employee showing gross income, total taxes paid, and total voluntary deductions.
Federal Income Tax Tax on the money you earn while working but national.
Property Tax Tax on the value of any owned property
Sales Tax Usually a percentage of the price of what you purchase.
State Income Tax Tax on the money you earn while working but state.
Capital Gains Tax Tax charged on the profits made on the sale of something that was purchased at a lower price.

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