Chapter 17 Review - Define Key Terms

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401(k)

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An employer-sponsored retirement plan, sometimes with matching funds.

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Federal Insurance Contributions Act

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A federal tax used to fund the public service programs Social Security and Medicare.

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Form 1040-EZ

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A simple income tax form that can be used by anyone who has an income of less than $100,000 and is not claiming dependents.

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Form 1-9

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An employment eligibility verification form filled out by both an employer and an employee.

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Form W-2

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A form prepared by an employer reporting an employee’s annual wages and the amount of taxes withheld from paychecks.

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Form W-4

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A form specifying the number of allowances in the Employee’s Withholding Allowance Certificate.

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Gross Income

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All of the income received in a year.

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Define gross pay

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The amount of money you earn before any payroll deductions

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Income tax

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Tax on the net income of an individual

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Medicare tax

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Tax on income used to pay for the Medicare (health) program provided to individuals over the age of 65 or individuals with a disability.