Category: IRS

Qualifying Relative There are tests that must be met to be a qualifying relative, they are: (1) not a qualifying child, (2) member of household or relationship, (3) citizenship or residency, (4) gross income, (5) support, (6) joint return, and (7) dependent taxpayer.

Qualifying Child To be a qualifying child, the dependent must meet eight tests: (1) relationship, (2) age, (3) residence, (4) support, (5) citizenship or residency, (6) joint return, (7) qualifying child of more than one person, and (8) dependent taxpayer.

Public Goods and Services Benefits that cannot be withheld from those who don’t pay for them, and benefits that may be “consumed” by one person without reducing the amount of the product available for others. Examples include national defense, streetlights, and roads and highways. Public services include welfare programs, law enforcement, and monitoring and regulating… Continue reading Public Goods and Services

Protective Tariff A tax levied on imported goods with the purpose of reducing domestic consumption of foreign-produced goods.

Proportional Tax A tax that takes the same percentage of income from all income groups.

Property Taxes Taxes on property, especially real estate, but also can be on boats, automobiles (often paid along with license fees), recreational vehicles, and business inventories.

Progressive Tax A tax that takes a larger percentage of income from high-income groups than from low-income groups.

Personal Identification Number (PIN) Allow taxpayers to “sign” their tax returns electronically. The PIN, a five-digit self-selected number, ensures that electronically submitted tax returns are authentic. Most taxpayers can qualify to use a PIN.

Personal Exemption Can be claimed for the taxpayer and spouse. Each personal exemption reduces the income subject to tax by the exemption amount.

Payroll Taxes Include Social Security and Medicare taxes.