Card Set Information

2012-02-27 02:53:11

Test #2 chapter 4
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  1. Personal income tax
    taxes imposed on income earned
  2. Gross Income
    All reported income from any source, including salary, interest income, dividend income, and capital gains recieved during the tax year
  3. interest income
    interest earned from investements in various types of savings accounts
  4. dividened income
    income recieved in the form of dividends paid on shares of stock or mutual funds
  5. capital gain
    income earned when an asset is sold for profit
  6. short-term capital gain
    gain on assets that were held less than 12 months
  7. long-term capital gains
    gains on assets held for longer than 12 months
  8. capital gains tax
    the tax that is paid on a gain earned as a result of selling an asset for profit
  9. adjusted gross income
    djusted gross income for contributions to IRA's, alimony payments, interest paid on student loans, and other special circumstances
  10. standard deduction
    a fixed amount that can be deducted from the adjusted gross income to determine taxable income
  11. marriage penalty
    many two-income marriagied people pay more taxes than if they were single
  12. itemized deductions
    specific expenses that can be deducted to reduce taxable income
  13. state income tax
    income tax imposed by some states on people who receive income from employers in that state
  14. real estate tax
    tax imopsed on a home or other real estatein the county where the property is located
  15. personal exemption
    the allowable amount by which taxable income is reduced for each person supported by income reported on a tax return
  16. marginal tax bracket
    the tax rate imposed on any additional income earned
  17. tax credits
    specific amounts used to directly reduce tax liability
  18. child tax credit
    tax credit allowed for each child in a household
  19. college expence cradits
    tax credit allowed to those who contribute toward their dependents college expenses
  20. coverdell savings account
    tax free account that can be used for a variety of school expenses
  21. earned income credit
    credit used to reduce tax liability for low-income taxpayers