Personal Finance- Chapter 7

the amount remaining when adjustments are subtracted from gross income

adjusted gross income

expenses that can be subtracted from gross income are called

adjustments

money paid to a former spouse for that persons support is

alimony

tax returns must be filled by

april 15th

an examination of taxes by the IRS is called

audit

money paid to a former spouse to help pay for a child

child support

an alternative to itemizing deductions, tax payers may__________

claim the standard deduction

the power to levy taxes rests with the ____

congress

for people who use form 1040EZ the IRS allows

electronic filing of tax returns and an electronic payment of taxes due

a sales tax on specific products and services is the __ tax

excise

an amount can be subtracted from your income for each person who depends on your income to live is an

exemption

when all sources of taxable income are added together the total is

gross income

do you have to be married to be Head of Household

no

a type of audit requiring a taxpayer to appear in person and bring records is

office

income tax is an example of a ____ tax

progressive

a tax that increases in proportion to increases in income is known as

progressive tax

forms of flat tax

property tax sales tax

a type of tax for which the rate stays the same regardless of income

proportional tax

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

regressive tax

a taxpayers filing status is ___ to his or her marital status

related

money collected by the government from various sources

revenue

in order to avoid itemizing deductions, a person may elect to take this

standard deduction

amount subtracted directly from tax owed

tax credit

to intentionally fail to pay taxes

tax evasion

money received in the form of salaries is __ income

taxable

alimony is ___ to the person receiving it and ___ to the one paying it

taxable deductible

money earned by individuals that is subject to taxation is called

taxable income

to compute your tax liability, turn to the tax tables and look up the amount called

taxable income

requires all citizens to be responsible for doing their taxes

volountary compliance

are unemployment compensation benefits taxable?

yes

administrative agency that collects taxes

Internal Revenue Service

the IRS is an agency of the _____ department

Treasury

how much is the maximum income that you can use a 140EZ

10,000