AP®︎ Business with Personal Finance: Topic 5.1 Flashcards

A tax based on an individual’s or household’s income and paid to a federal, state, or local government

The portion of an employee’s paycheck that an employer sends to the government as a prepayment toward the employee’s income tax liability

An annual filing that reports income, deductions, credits, taxes already paid, and final income tax liability

The total amount of tax a taxpayer is legally required to pay

The return of an overpayment when taxes already paid exceed final tax liability

An income-tax system in which higher portions of taxable income are taxed at higher rates

A range of taxable income to which a particular tax rate applies

The tax rate applied to the last portion of a taxpayer’s taxable income, not to all income

Total tax divided by total taxable income

The amount of income on which income tax is calculated after applicable adjustments and deductions

An allowable amount that reduces taxable income rather than directly reducing tax owed

An allowable amount that directly reduces the tax owed

The amount by which an asset’s selling price exceeds its cost basis when the asset is sold

A tax on a realized capital gain, generally reported with an income tax return and often charged at a different rate from ordinary income

A tax associated with earnings from work that supports specified government insurance and benefit programs

A tax based on the taxable or assessed value of property such as a house, land, or car

A tax based on the sales price of a taxable item or service, collected from the customer by the seller and submitted to the government

A record of an employee’s gross pay, deductions, and net pay for a pay period, often including year-to-date totals

Total compensation earned during a pay period before any deductions

Biweekly pay occurs every two weeks, usually 26 times per year; semimonthly pay occurs twice each month, or 24 times per year

An amount removed from an employee’s gross pay before net pay is received

An amount an employer is legally required to withhold, commonly including income-tax withholding and employee payroll taxes

An employee-authorized deduction for a benefit or arrangement such as insurance, retirement saving, or union dues

A pretax deduction reduces applicable taxable pay before taxes are calculated; an after-tax deduction reduces the paycheck after applicable taxes are calculated

The amount an employee receives after all mandatory and voluntary deductions are subtracted from gross pay

The cumulative amount earned, deducted, or paid from the beginning of the calendar year through the current paycheck