Lesson 5 Taxes Vocabulary Review

The standard Internal Revenue Service (IRS) form that individuals can use to file their annual income tax return

• 1099

• 1040

• W2

• W4

A form that details all "non-employee" compensation, including for specific jobs like freelancers or contractors. You receive one of these for income that you earned which wasn't earned from an employer.

• 1099

• 1040

• W2

• W4

Employee-claimed exemptions on the W-4 to determine how much of an employee's pay to withhold from his or her paycheck for taxes

• dependents

• allowances

• audit

• capital gains

An inspection of a filer's tax return by the IRS

• allowance

• audit

• capital gains

• 1040

Profit from the sale of an asset, such as a stock or a bond, calculated by subtracting the price you initially paid from the price you then sold it for

• corporate tax

• capital gains

A percentage of profits paid by a business to the federal and state government

• personal income tax

• state income tax

• corporate income tax

Someone you financially support who can be "claimed" on a tax return to reduce your taxable income and lower your taxes.

• filing status

• dependent

• capital gains

Spending by the federal government determined by legislative action and approved through votes by elected officials

• discretionary spending

• mandatory spending

Money from the profits of a company that is paid out to its shareholders, typically on a quarterly basis

• dividends

• corporate income tax

Any income (wages/salary) that is generated by working

• earned income

• state income

• interest income