Personal Finance

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What is Social Security?

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

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What is the standard IRS form for filing annual income tax returns?

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Form 1040.

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What is a W-4 form?

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A form completed by an employee to indicate his or her tax situation (exemptions, marital status, etc.) to the employer, who then withholds the corresponding amount of taxes from each paycheck.

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What is net pay?

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The amount people receive after taxes and other deductions are taken out.

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What are taxes?

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Government fees on business and individual income, activities, products, or property.

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What is gross pay?

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The total amount earned by an employee before any deductions are made.

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What is the purpose of income tax?

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To fund government services and programs by taxing individuals' earnings.

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What is a W-2 form?

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A form that an employer sends to an employee and the IRS, detailing the employee's annual wages and the amount of taxes withheld.

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What is the difference between fixed and variable expenses?

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Fixed expenses remain constant each month (e.g., rent), while variable expenses can fluctuate (e.g., groceries).

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What is a budget?

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A plan that outlines expected income and expenses over a specific period.