Our tax system ( chapter 7 financial literacy )

Exemption

allowance, or credit, is allowed for each exemption claimed by a taxpayer

Regressive taxes

allows a higher-income person to pay a lower percentage of income in taxes than a lower-income person.

Filling status

is an important factor when computing taxable income under the federal income tax in the United States.

Proportional taxes

type of tax that is based on the value of property owned

Revenue

Money collected by the government from various sources

Taxable income

Money earned by individuals that is subject to taxation is called ___________________

Progressive taxes

Tax that increases in proportion it increases in income( take a larger share of income as the amount of income grows. Federal incomes taxes are progressive.( it's Hurt the poor and federal government )

Adjusted gross income

The amount remaining when adjustments are subtracted from the gross income is called __________________

Tax evasion

To Intentionally fail to pay taxes owned is to commit a felong offense called

Gross income

When all sources of taxable income are added together, the total is called ___________________

Tax bracket

a range of incomes taxed at a given rate.

Dependent

An amount that can be subtracted from your income for each person who depends on your income to live is a dependent.

Audit

An examination of tax returns by the IRS is called _____________

Itemized debut ions

Are expense you can subtract from adjusted gross income to determine your taxable income.

Standard deduction

In order to avoid itemizing deductions, a person may elect to take the standard deduction, which is a flat amount.

Tax credit

A tax credit is an amount subtracted directly from tax owed.

Voluntary compliance

A tax system that is based on voluntary compliance requires all citizens to be responsible for preparing and filing their tax returns on time & paying taxes due