Consumer Education Chapter 3

income tax

percent of a person's income

philanthropy

the act of giving away money, goods, services or time to support a cause

false

you do not have to pay income taxes if you earn less than $5 per hour

tax deductions

amounts deducted from your adjusted gross income

estate tax

collected when property is passed on

service-learning

combines service to the community with classroom studies

social security

disability, retirement, life in

share save spend system

dividing your funds into 3 categories based on your own personal value system

share

doing something important with your money in a very personal way

true

financial planning takes a lot of time and effort to do correctly

1040EZ

if you taxable income is less than 1 million, you don't claim any dependents and you file as single or are married filing jointly, then you may be able to file for 1040EZ

false

it is best not to involve others in your financial planning, which is a private, personal matter

spend

less emphasis of everyday wants

steps in creating a financial plan

look at current situation, identify and prioritize your goals, develop long term plan, organize your record, set up budget, keep it simple

1099

miscellaneous income

income

money earned for work allowances, gifts or investments

taxes

money people pay to their local, state and federal govts. to fund programs

with holding

money taken out to pay taxes, soc. sec, unemployment

false

most donors to charity are very wealthy

1040 form

one of the official documents that US taxpayers can file their annual income tax return

over draft fee

penalty for having a negative balance in your account

save

putting money away for short medium and long term goals

altruism

selfless concern for the welfare of others

W-2

shows the total amount of money withheld form your paycheck throughout the year

W-4 form

tells your employer what to withhold for the correct federal income tax from your pay

property tax

tax on the land people own

sales tax

tax paid when you make a purchase

expenses

things paid for with your money

false

to file your income tax return, you are required to get help from a tax preparation

adjusted gross income

total income minus certain adjustments

true

volunteering your time is just as important as sharing your money

true

when developing a financial plan, you have to consider your current financial situation-- even if you plan to change everything