Copyright

Personal Taxes Flashcards

Personal Taxes Flashcards
1/34 (missed) 0 0
Create Your Account To Continue Studying

As a member, you'll also get unlimited access to over 79,000 lessons in math, English, science, history, and more. Plus, get practice tests, quizzes, and personalized coaching to help you succeed.

Try it risk-free
Try it risk-free for 30 days. Cancel anytime
Already registered? Log in here for access
Disadvantages attributed to the progressive tax system

Punishes individuals who do more work

Encourages people to hide their assets

Leads to class warfare

Discriminates against higher earning individuals

Got it
Luxury Tax
A progressive tax levied on high-end goods, including certain automobiles and jewelry.
Got it
Estate Tax
This tax imposed on the assets of a deceased person when the value of such assets exceeds a certain limit.
Got it
Advantages attributed to the progressive tax system

Encourages social justice

Raises larger amounts of government revenue

Re-distributes wealth to encourage income equality

Got it
Progressive Tax Examples

Luxury tax

Income tax

Estate tax

Got it
Stipulations on Home Office Deductions

The office can serve only one purpose

It must act as the primary place of business

It passes the 'regular use test'

Got it
Tax advantages of owning a home
Owning a home gives you the advantage of deducting the expenses associated with property taxes and interest off your mortgage.
Got it
Flexible Spending Account (FSA)
This account is used to hold money before it's taxed in order to pay for medical expenses that must be handled out-of-pocket.
Got it
Schedule A of Form 1040
You can use this form to list your itemized deductions.
Got it
Adjusted Gross Income (AGI)

A modified amount of your income before federal itemized/standardized deductions and exemptions are considered.

Got it
Deductions
Deductions serve to lower your taxable income. You may itemize them or take a standard amount. This decision is based on whichever option is larger.
Got it
Allowable Filing Statuses

Married

Head of household

Single

Widow(er)

Got it
Adjusted Gross Income (AGI) Formula
AGI = an individual's taxable income - all relevant exemptions - deductions
Got it
Advantages to using a professional tax preparer for global corporate taxes
Individuals in this field offer businesses a valuable service because tax laws vary by state and country.
Got it
Tax rate for personal service corporations
Personal service corporations, such as accountants or law offices, always have a tax rate of 35%.
Got it
Corporate Taxes
These are the taxes that corporations must pay. They're determined based on a graduated system.
Got it
Internal Revenue Service (IRS)
This agency is responsible for managing tax laws in the U.S. along with tax collection.
Got it

Ready to move on?

or choose a specific lesson: See all lessons in this chapter
34 cards in set

Flashcard Content Overview

This set of flashcards was set up to help you focus on different kinds of federal and state taxes. You can go over payroll tax, corporate tax, progressive tax, property tax and sales tax. The agencies that collect taxes, including the IRS, will also be covered by these flashcards. You can review methods for filing taxes, the audit process and how deductions apply to the tax process.

Front
Back
Internal Revenue Service (IRS)
This agency is responsible for managing tax laws in the U.S. along with tax collection.
Corporate Taxes
These are the taxes that corporations must pay. They're determined based on a graduated system.
Tax rate for personal service corporations
Personal service corporations, such as accountants or law offices, always have a tax rate of 35%.
Advantages to using a professional tax preparer for global corporate taxes
Individuals in this field offer businesses a valuable service because tax laws vary by state and country.
Adjusted Gross Income (AGI) Formula
AGI = an individual's taxable income - all relevant exemptions - deductions
Allowable Filing Statuses

Married

Head of household

Single

Widow(er)

Deductions
Deductions serve to lower your taxable income. You may itemize them or take a standard amount. This decision is based on whichever option is larger.
Adjusted Gross Income (AGI)

A modified amount of your income before federal itemized/standardized deductions and exemptions are considered.

Schedule A of Form 1040
You can use this form to list your itemized deductions.
Flexible Spending Account (FSA)
This account is used to hold money before it's taxed in order to pay for medical expenses that must be handled out-of-pocket.
Tax advantages of owning a home
Owning a home gives you the advantage of deducting the expenses associated with property taxes and interest off your mortgage.
Stipulations on Home Office Deductions

The office can serve only one purpose

It must act as the primary place of business

It passes the 'regular use test'

Progressive Tax Examples

Luxury tax

Income tax

Estate tax

Advantages attributed to the progressive tax system

Encourages social justice

Raises larger amounts of government revenue

Re-distributes wealth to encourage income equality

Estate Tax
This tax imposed on the assets of a deceased person when the value of such assets exceeds a certain limit.
Luxury Tax
A progressive tax levied on high-end goods, including certain automobiles and jewelry.
Disadvantages attributed to the progressive tax system

Punishes individuals who do more work

Encourages people to hide their assets

Leads to class warfare

Discriminates against higher earning individuals

Sales Tax
These taxes are paid when you buy some services and goods in order to fund state government operations, including state hospitals.
Property Tax
Taxes of this type must be paid to your local government if you own certain kinds of property, including businesses, cars and homes. It's used to fund the operation of local government.
Capital Gains Tax
A form of tax collected by the federal government on profits you make from investments, such as when you sell a security for more than you paid for it.
Medicare
This program is set up federally and provides insurance for Americans who have retired.
Social Security
A federal program funded by payroll tax that offers individuals benefits for disability and retirement. This program also offers survivor's benefits.
Due date for U.S. income taxes
These taxes are always due on April 15th.
Options for Filing Individual and Business Taxes

File electronically, with some stipulations

File by mailing in forms

Tax Code
A code that lists tax rules. It's very complex and is also subject to frequent changes.
Tax Audit
This occurs if the IRS decides to investigate your tax return. You may need to complete the audit by mail, by phone, or by traveling to an IRS office located close to you.
Consequences of audits where no fraud is detected
Ask for an amended return and payment or send a refund.
Personal Federal Income Tax Returns
All individuals must file these returns. Additionally, you can only receive a refund after filing this return.
Address for personal tax returns
There is no set address for returning these forms. You must find the proper address for your state.
Progressive Tax
A kind of tax that occurs if your tax rate rises along with your income.
Payroll Tax
The federal government draws these taxes from both employers & employees. Examples include income tax, Medicare tax and Social Security tax.
State Income Tax
A form of income withholding that functions much like federal income tax. Be aware that not all states use this kind of tax.
W-4
The tax form used for federal tax withholding claims.
How payroll taxes are calculated
These taxes are determined based on the number of hours an employee works and how much he or she is paid.

To unlock this flashcard set you must be a Study.com Member.
Create your account

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member

Already a member? Log In

Support