Chap 8 - Vocab Test

Income calculated by taking total income and subtracting allowable amounts including contributions to certain retirement accounts, alimony payments, interest paid on student loans, and other expenditures identified by the IRS.

• gross income

• capital gains

• adjusted gross income

• gross pay

A taxable gain that occurs when you sell an asset for more than what you paid for it.

• adjusted gross income

• capital gains

• gross income

• gross pay

Total amount of a person's income from (almost) any source

• adjusted gross income

• capital gains

• gross income

• gross pay

The total amount of money earned

• adjusted gross income

• capital gains

• gross income

• gross pay

A branch of the U.S. Treasury Department, is the government body that carries out the federal tax system

• adjusted gross income

• capital gains

• gross pay

• Internal Revenue Service (IRS)

Specific expenses that, under tax law, can be deducted from income to reduce the amount of income subject to income tax.

• itemized deductions

• Medicare

• net pay

• personal income taxes

Provides health care coverage to mostly older Americans and some younger disabled people.

• itemized deductions

• Medicare

• net pay

• personal income taxes

The amount of money an employee takes home after taxes

• itemized deductions

• Medicare

• net pay

• personal income taxes

Includes federal income taxes and, in those states that have them, state income taxes

• Medicare

• net pay

• personal income tax

• payroll taxes

Federal and state taxes withheld from a person's paycheck and sent to the government by his employer

• Medicare

• itemized deductions

• payroll taxes

• Social Security