Section 2: Federal Taxes

Amounts you can subtract from your income when filling taxes:

Deductions

Tax on a monetary gift from a living person valued above a certain amount:

gift tax

Form used to file ones income tax:

tax return

Income on which tax must be paid:

taxable income

What is medicare?

A national health insurance program that helps pay for healthcare for people over the age of 65.

Why do employers withhold a set amount of your income?

Because it is based off how much you owe in federal income taxes for the entire year.

What does social security provide?

It funds old age, survivors, and disability.

What is taxable income?

It is a persons gross income minus exemptions and deductions.

What items are taxed for the purpose of changing behavior?

Tobacco and alcohol gets taxed to change behavior of people.

Tax on the total value of the money and property of a person who has died:

estate tax

Tax levied on foreign goods brought into the United States:

tariff

Tax payments taken out of an employees pay before he or she receives a paycheck:

withholding