Financial Lit Ch 12
a federal tax collected on the value of a person's property at the time of his or her death
estate tax
an amount of income that is not included in a person's gross income
exclusion
a deduction from a person's adjusted gross income for himself or herself, a spouse, and qualified dependents
exemption
A self-employed person is subject to a penalty if he or she
fails to make quarterly payments on time
determines whether a person has paid too much or too little in income taxes over the year.
income tax return
to take out Social Security and income tax payments from an employee's paycheck and send it to the Internal Revenue Service.
withhold
Form 1040A is the easiest tax form to complete.
FALSE
Property tax is the primary source of revenue for the federal government
FALSE
The amount of federal income tax an employer withholds to send to the IRS depends on your tax credits.
FALSE
You can deduct medical expenses up to 75% of your adjusted gross income.
FALSE
A tax audit is a detailed examination of your tax return by the IRS.
TRUE
A taxpayer must provide more than half of a dependent's support to claim him or her on the tax return.
TRUE
An excise tax is a tax on specific goods and services
TRUE
If you are self-employed, you must make estimated tax payments to the IRS throughout the year.
TRUE
a person's gross income after certain reductions such as contributions to an IRA or student loan interest
adjusted gross income
Some states collect a personal property tax on
automobiles
Earned income includes
bonuses from work
Which itemized deduction is subject to limitations
charitable contributions
Which amounts are included in your gross income?
deductions, exemptions, and reductions
The federal government collects a gift tax when
one person gives another land worth $20,000
any expense a person is allowed to subtract from his or her adjusted gross income to arrive at his or her taxable income
tax deduction
the total amount of taxes a person owes
tax liability
Earnings on a traditional IRA are
tax-deferred
The interest made from municipal bonds is usually
tax-exempt
the amount of income on which a person's income tax is computed.
taxable income