Unit 1 NGPF Taxes

Front

What is the formula to calculate net income?

Back

Net Income = Gross Income - Deductions

Front

If a person has a gross income of $500 and deductions of $150, what is their net income?

Back

$350

Front

What is net pay (take-home pay)?

Back

Net pay is the amount of money an employee takes home after all deductions, including taxes and other withholdings.

Front

What is Medicare?

Back

Medicare is a federal health insurance program primarily for individuals aged 65 and older, as well as for some younger people with disabilities.

Front

What happens if you underpay your federal taxes?

Back

You may receive a tax bill for the amount you owe, plus potential penalties and interest.

Front

What is the due date for federal tax returns in the United States?

Back

April 15 of each year.

Front

What are deductions in the context of income tax?

Back

Deductions are expenses that can be subtracted from gross income to reduce taxable income.

Front

What is the difference between gross income and net income?

Back

Gross income is the total income earned before any deductions, while net income is the income remaining after deductions.

Front

What types of deductions might be taken from gross income?

Back

Common deductions include federal taxes, state taxes, Social Security, Medicare, and health insurance premiums.

Front

How do you calculate the amount owed to the IRS if you underpaid your taxes?

Back

Subtract the amount you paid from the amount you should have paid.