Tag: tax

Income Taxes Taxes on income, both earned (salaries, wages, tips, commissions) and unearned (interest, dividends). Income taxes can be levied on both individuals (personal income taxes) and businesses (business and corporate income taxes).

Horizontal Equity The concept that people in the same income group should be taxed at the same rate. “Equals should be taxed equally.”

Head of Household Filing Status You must meet the following requirements: 1. You are unmarried or considered unmarried on the last day of the year. 2. You paid more than half the cost of keeping up a home for the year. 3. A qualifying person lived with you in the home for more than half… Continue reading Head of Household filing status

Gross Income Money, goods, services, and property a person receives that must be reported on a tax return. Includes unemployment compensation and certain scholarships. It does not include welfare benefits and nontaxable Social Security benefits.

Gasoline Excise Tax An excise tax paid by consumers when they purchase gasoline. The tax covers the manufacture, sale, and use of gasoline.

Form W-4, Employee’s Withholding Allowance Certificate Completed by the employee and used by the employer to determine the amount of income tax to withhold.

Formal Tax Legislation Process This is another term for a proportional tax.

Flat Tax This is another term for a proportional tax.

Financial Records Spending and income records and items to keep for tax purposes, including paycheck stubs, statements of interest or dividends earned, and records of gifts, tips, and bonuses. Spending records include canceled checks, cash register receipts, credit card statements, and rent receipts.

Filing Status Determines the rate at which income is taxed. The five filing statuses are: single, married filing a joint return, married filing a separate return, head of household, and qualifying widow(er) with dependent child.