paying your taxes

paying your taxes

Term Definition
W2 Report sent from the employer to both the IRS and the employee showing gross income, total taxes paid, and total voluntary deductions.
1040EZ The quick tax form most often used for those with uncomplicated tax situations.
1099INIT Report on interest income sent from the bank to both the IRS and the taxpayer for savings account interest.
FICA 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.
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.
standard deduction The deduction allowed for those not claimed as a dependent on a parent’s taxes.
federal income tax The federal government charges income tax on all its residents. In this tax system, you are taxed on the money you earn while working.
Property tax are taxes an owner pays on the value of any owned property, including land, buildings, or houses.
sale tax his means when you pay for something, the sales tax is added to the total before you pay. Sales tax is usually a percentage of the price of what you purchase. This sales tax rate varies from state to state. Sales taxes don't figure into income tax.
state income tax In this tax system, you are taxed on the money you earn while working. State income taxes are charged in addition to federal taxes, though requirements for state income tax vary from state to state.
capital gains tax is a tax charged on the profits made on the sale of something that was purchased at a lower price. People usually make capital gains from the sale of stocks, bonds, and property.

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