Chapter 7 Test Personal Finance
Filing Status
affects how much you will pay in taxes
Out income tax system is based on compliances
all citizens are expected to prepare and file income tax returns
Tax Credit
an amount subtracted directly from the tax owed, Its for college tuition, and child care
Exemptions
an amount you may subtract from your income for each person who depends on your income to live
Taxable Income
compute tax that you owe
Deductions
expenses the law allows you to subtract from your adjusted gross income to determine your taxable income
Itemize
lots of medical, dental expenses, gifts, property damage
3 forms 1040EZ
no dependents and less then $50,000 you may use it for single or married and claims no dependents
Standard Deduction
stated amount that you may subtract from adjusted gross income instead of itemizing your deductions
Adjusted Gross Income
take away deductions, exemptions
1040A
with dependents, and certain deductions and still less than $50,000
W-4
Zero Exemption- holds out most money
Gross Income
Form W-2= the form your employer must give you by January 31
Math Minutes
Gross Income Adjustments Adjustments Gross Income Exemptions Taxable Income Tax Credit
Returns have to be filed by
April 15
IRS two main functions
Collect income taxes Enforce tax laws
6 Blue Heading
Filing Status Exemptions Gross Income Adjusted Gross Income Taxable Income Tax Credit