Personal Finance (Taxes Unit)

*Net Pay

Amount of income left after taxes and deductions have been taken out.

*Allowance

An exemption that reduces how much income tax an employer deducts from an employee's paycheck

*Tax Deduction

An expense, such as a charitable contribution, that can be deducted from one's taxable income

*Personal Property Tax

Annual tax imposed on certain personal property, such as cars or boats and based on the value of the property.

*FICA

Federal Insurance Contributions Act

*Tax Return

form used to file income taxes

*Sales Tax

A tax on a sale of merchandise or services

*Income Tax

A tax on people's earnings

*Real Estate Tax

a tax imposed on a home or other real estate in the county where the property is located

*Taxable Income

income on which tax must be paid; total income minus exemptions and deductions

*Tax-Exempt Income

income that is not taxed

*Tax Deferred Income

income that is taxed at a later date

*Gross Pay

the total amount of an employee's earnings before deductions are taken out

*Tax Liability

the total amount of taxes owed