personal finance net pay and income tax

401K plan

A 401(k) is a retirement savings plan sponsored by an employer. It lets workers save and invest a piece of their paycheck before taxes are taken out. Taxes aren't paid until the money is withdrawn from the account.

403B

A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan, is a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations, and certain ministers. Individual accounts in a 403(b) plan can be any of the following types.

Marginal income tax

A marginal tax rate is the amount of tax paid on an additional dollar of income. This method of taxation aims to fairly tax individuals based upon their earnings, with low-income earners being taxed at a lower rate than higher income earners.

Excise Tax

Excise taxes are taxes paid when purchases are made on a specific good, such as gasoline. Excise taxes are often included in the price of the product. There are also excise taxes on activities, such as on wagering or on highway usage by trucks

Gross Pay

Gross pay is the total amount of money you get before taxes or other deductions are subtracted from your salary. Your gross income or pay is usually not the same as your net pay especially if you must pay for taxes and other benefits such as health insurance.

1040ez form

IRS Tax Form 1040EZ is the shortest federal individual income tax form. It is designed for taxpayers whose filing status is "single" or "married filing jointly" with no dependents. The 1040EZ is less complex than Tax Form 1040 and Tax Form 1040A, so it generally takes less time to fill out and process.

Social security card

In the United States, a Social Security number (SSN) is a nine-digit number issued to U.S. citizens, permanent residents, and temporary (working) residents under section 205(c)(2) of the Social Security Act.

Net pay

Net pay is the amount of a person's paycheck left over after any deductions are taken out. This commonly includes federal and state tax withholding, Social Security and Medicare taxes. In addition, any voluntary with holdings, such as the employee's share of medical insurance, reduce the net pay.

Payroll card

Payroll cards are an alternative to direct deposit or paper checks. These cards are issued by major payment processors, such as Visa, allowing workers to use them anywhere credit cards are accepted. Users access their money from an ATM or cash back purchase in the same manner as with a traditional debit or credit card. Puts the money you earned from your job on the card.

passport

The passport card is a wallet-size travel document that can only be used to re-enter the United States at land border-crossings or ports-of-entry by sea from Canada, Mexico, the Caribbean, and Bermuda. It proves that it is you

calculating taxable income

To calculate your taxable income, add up all income earned in the calendar year, including items such as salary, investment gains and rental income. Your tax liability is then reduced by adjustments to income, deductions and exemptions.

Volunteer deduction

Voluntary deductions are agreed upon deductions from wages that are withheld from an employee's paycheck. These deductions are initiated by multiple offices across campus; including, but not limited to, Payroll, Benefits, Parking, IMA (Recreational Sports Program), Husky Card, and Gift Account Offices.

Sales Tax

What is a 'Sales Tax' A sales tax is a consumption tax imposed by the government on the sale of goods and services. A conventional sales tax is levied at the point of sale, collected by the retailer and passed on to the government. A business is liable for sales taxes in a given jurisdiction if it has a nexus there, which can be a brick-and-mortar location, an employee, an affiliate, or some other presence, depending on the laws in that jurisdiction.

wage

a fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.

Salary

a fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee, especially a professional or white-collar worker.

license

a permit from an authority to own or use something, do a particular thing, or carry on a trade (especially in alcoholic beverages). Is used as primary source of identification. It proves who you are.

adjusted gross income

adjusted gross income (AGI) is an individual's total gross income minus specific deductions. Taxable income is adjusted gross income minus allowances for personal exemptions and itemized deductions. For most individual tax purposes, AGI is more relevant than gross income.

Tax credit

an amount of money that can be offset against a tax liability.

Social Security

any government system that provides monetary assistance to people with an inadequate or no income. a federal insurance program that provides benefits to retired people and those who are unemployed or disabled.

Payroll tax

are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff. Payroll taxes generally fall into two categories: deductions from an employee's wages, and taxes paid by the employer based on the employee's wages.

W-2

is the form that an employer must send to an employee and the Internal Revenue Service (IRS) at the end of the year. The W-2 form reports an employee's annual wages and the amount of taxes withheld from his or her paycheck.

itemized deduction

itemized deductions are eligible expenses that individual taxpayers can claim on federal income tax returns and which decrease their taxable income, and is claimable in place of a standard deduction, if available.

Straight time

normal working hours, paid at a regular rate.

Personal Deduction

personal exemption is an amount that a resident taxpayer is entitled to claim as a tax deduction against personal income in calculating taxable income and consequently federal income tax. The personal exemption amount is adjusted each year for inflation.

Income Tax

tax levied by a government directly on income, especially an annual tax on personal income

Average tax rate

the average rate you are taxed in a tax bracket

Direct Deposit

the electronic transfer of a payment directly from the account of the payer to the recipient's account. The money can be used very quickly

Overtime

time in addition to what is normal, as time worked beyond one's scheduled working hours.Hours over 40 hours, you get paid more, the rate is 1.5

Tax refund

Taxpayers can often get a tax refund on their income tax if the tax they owe is less than the sum of the total amount of the withholding taxes and estimated taxes that they paid, plus the refundable tax credits that they claim. (Tax refunds are money given back at the end of the financial year.)

1099 form

The 1099 form is a series of documents the Internal Revenue Service (IRS) refers to as "information returns." There are a number of different 1099 forms that report the various types of income you may receive throughout the year other than the salary your employer pays you.

Pay periods

The date on which employees are paid, i.e., checks are distributed (pay day). The paycheck date is used to determine when payroll liabilities are due, based on deposit schedules. Pay period dates: The pay period begin and end dates represent the period in which employees worked or earned wages.

what do taxes pay for

The federal taxes you pay are used by the government to invest in technology and education, and to provide goods and services for the benefit of the American people. The three biggest categories of expenditures are: Major health programs, such as Medicare and Medicaid. Social security.

Fica Tax

is the federal law that requires you to withhold three separate taxes from the wages you pay your employees. FICA is comprised of: a 6.2 percent Social Security tax; a 1.45 percent Medicare tax (the "regular" Medicare tax). 7.65%

calculating net income

gross income - tax deductions = net income

standard deduction

is a dollar amount that reduces your taxable income. It is a benefit that eliminates the need for many taxpayers to itemize actual deductions, such as medical expenses, charitable contributions, and taxes, on Schedule A (Form 1040).

Tax deduction

is a reduction of income that is able to be taxed, and is commonly a result of expenses, particularly those incurred to produce additional income. The difference between deductions, exemptions and credit is that deductions and exemptions both reduce taxable income, while credits reduce tax.

W-4

is simple ― it is used by your employer to withhold the proper amount of federal income tax from your paycheck. The IRS recommends that employees submit a new W-4 tax form each year, or any time their personal or financial situation changes.

Medicare

is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD). tax = 1.45%