Pay and Taxes

What is the FICA tax?

• Primarily a credit card tax
•  a tax on investment income
• another name for the marginal tax rate system
•  a tax collected primarily to fund Social Security and Medicare

Net income is:

• the total amount of money you earn

• the amount of money you receive after taxes and deductions are subtracted from your gross income

• the amount of money that is taken away in the form of taxes

• the hourly rate of pay

Alyssa has her first job at the local bakery. After working for one week, she received her first paycheck. The total amount of money she is able to put in the bank is $75.62. What type of income does this amount describe?

• Gross Income

• Net Income

• Both Gross and Net Income

• None of the above

What is the amount of money you earn, before taxes are taken out?

• Net Income

• Gross Income

• Taxable Income

• Actual Income

If Amy gets a raise at work and her gross income increases, which statement is more likely to be true?

• Since her gross income increased, her net income will decrease.

• Since her gross income increased, her property tax will increase.

• Since her gross income increased, her net income will increase.

• None of the above

the total amount of taxes owed

• estate tax
• inheritance tax
• income tax return
• tax liability

tax on wages, salaries, and self- employed earnings

• estate tax
• income tax
• tax liability
• income tax return

a form on which a taxpayer reports how much money he or she earned from working and the exact taxes owed

• income tax
• tax liability
• income tax return
• inheritance tax

amount of money set by IRS that is not taxed

• standard deduction
• taxable income
• exclusion
• tax deduction

Vickie has a taxable income of $40,000. If she pays 20% in income tax, what is the amount of income tax she will pay?

• 8000

• 80000

• 2000

• 1200