Tax Vocab

A federal law that requires an employer to withhold taxes from the wages they pay their employees; the funds go toward Social Security and Medicare

• Federal Tax

• FICA Tax

• Medicaid

• W4

The standard Internal Revenue Service (IRS) form that individuals can use to file their annual income tax returns

• 1040

• W2

• W4

• I9

Form that details all "non-employee" compensation, including for specific jobs like freelancers or contractors

• 1040

• W4

• 1099

• W2

Someone you financially support who can be "claimed" on a tax return to reduce your taxable income and lower your taxes

• Exemption

• Dependent

• Allowance

• Credit

Spending by the federal government determined by legislative action and approved through votes by elected officials

• Mandatory Spending

• Fixed Spending

• Periodic Spending

• Discretionary Spending

The actual rate you pay on your taxes, as a percentage of your overall income

• Effective Tax Rate

• Corporate Tax Rate

The set amount of money, per dependent, you can subtract from your taxable income

• Deductible

• Allowance

• Exemption

Taxes paid by employees to federal and state government through a direct deduction from their paycheck

• Income Tax

• Sales Tax

• FICA

A government-run insurance program that provides healthcare assistance to elderly and disabled Americans

• Medicare

• Medicaid

A federal program that provides monthly benefits to millions of Americans, including retirees, military families, surviving families of deceased workers, and disabled individuals

• SNAP

• Medicare

• Social Security