Personal Finance 12 Vocab

income tax return

A form such as a 1040 or 1040EZ on which a taxpayer reports how much money here she received from working in other sources in the exact amount of taxes that are owed

exclusion

tax-exempt income; income that is not subject to taxes

adjusted gross income

your gross income after calculated certain reductions

Itemized deduction

a specific expense, such as a medical expense, that you deduct from your adjusted gross income

deducts itemized expenses

A person who _______ ________ ________ (medical costs) files a 1040 tax form.

inheritance tax

A state tax collected on the property left by a person to his or her heirs and I will

exclusions

Amounts not included in gross income are __________.

bonuses

Earned income includes _______.

tax-deferred

Earnings on traditional IRA are ___-________.

tax-exempt

Interest made on a municipal bond is ___-______.

fails, quarterly payments

Self-employment is subject to penalty if he or she _____ to make ________ ________ on time.

automobiles

Some states collect personal property taxes on ___________.

tax audit

a detailed examination of your tax return by the IRS

gives, land, $20,000

The federal government collects gift taxes if a person _____ someone _____ worth ______.

estate tax

The federal tax collected on the value of a persons property at the time of his or her death

income tax

The tax on wages shares salaries in self-employed earnings

tax liability

The total amount of taxes owed

charitable contributions

What type of itemized deduction is subject to limitations?

taxes owed

You subtract tax credit from _____ ____.

exemption

a deduction from adjusted gross income for the tax payer, the spouse, and qualified dependents

taxable income

adjusted gross income less any allowable tax deductions and exemptions

allowance

an adjustment to the tax withheld from your paycheck, based on your marital status & whether you have dependents

Standard deduction

an amount of money set by the IRS that is not taxed

tax credit

an amount of money that can be subtracted directly from taxes you owe

extension

an extended deadline for filing an income tax return, but does not delay your tax liability

tax deduction

and expense that you can subtract from your adjusted gross income to find your taxable income