Chapter 10: Income and Taxes

Front

What is the total tax a person or business has to pay called?

Back

Tax liability

Front

The money you earn hourly for your time and effort at work is called your _____________.

Back

Wages

Front

True or False: Giving to a nonprofit organization can help lower your taxable income.

Back

True

Front

True or False: If you work and earn money, you will have to pay taxes.

Back

True

Front

What is the main IRS form that most Americans use to file their taxes?

Back

Form 1040

Front

What is the term for the amount of money you earn before any taxes or deductions are taken out?

Back

Gross income

Front

What is the term for the amount of money you take home after taxes and deductions?

Back

Net income

Front

What is the purpose of a tax return?

Back

To report income, calculate taxes owed, and claim refunds or credits.

Front

What is a progressive tax system?

Back

A tax system where the tax rate increases as income increases.

Front

What is a tax deduction?

Back

An expense that can be subtracted from gross income to reduce taxable income.