Paystub and Taxes Vocabulary

The total amount of money earned before deductions.

• withholding

• salary

• net pay

• gross pay

What does standard deduction mean?

• The amount of taxes that are deducted

• The specific amount reported to the IRS

• A specific dollar amount that reduces the amount of income on which you're taxed

• The amount received after taxes and other deductions

What is tax liability?

• The tax forms filled out for income reporting

• The government's reliance on citizens for honest tax reporting

• The amount of taxes you owe on your taxable income for the year

• A specific dollar amount that reduces your income for tax purposes

What is net pay?

• The amount of tax owed on income

• The specific dollar amount that reduces taxable income

• The before tax contributions.

• The amount of money received after taxes and other deductions.

What does voluntary compliance mean in the context of income taxes?

• The amount of tax owed by an individual

• The specific dollar amount that reduces taxable income

• The tax forms filled out for income reporting

• The government relies on citizens to file honest and accurate annual returns, but the payment of income taxes is mandatory

Before tax contributions is a

• flexible spending account (FSA)

• to save money

• to delay the payment process

• to receive a larger refund later

You put off paying income tax on the earnings until you withdraw funds during retirement

• tax-deferred contribution

• flexible spending account (FSA)

• cafeteria plan

• withholding tax

Flexible benefits plans that allow employees to choose from a variety of benefits.

• cafeteria plan

• tax-deferred contribution

• flexible spending account

• withholding tax

Sent to you by an entity that paid you income during the previous year.

• Form 1040

• Form 1099

• Form W-4

• Form 8812

Which form should be used to report the income from wages, bank interest, and ordinary stock dividends?

• Form 1040EZ

• Form W-2

• Form 1040

• Form 1099-DIV