Ch 3 Vocab

What is a federal income tax return?

• A form used to file income tax with the Internal Revenue Service

• A summary of an employee’s earnings

• A receipt of an inheritance

• A retirement account

Who is a tax return preparer?

• Someone who creates their own job

• Any person who completes tax returns for others

• A person who receives an inheritance

• An individual who invests in stocks

What does a W-2 form summarize?

• A taxpayer's deductions

• An employee’s earnings and amounts withheld

• A list of capital assets

• A summary of estate taxes

What is gross income?

• Income after taxes

• Sum of earned and unearned income within a specific period

• Income from capital gains

• Income from inheritance

What is an IRA?

• A tax form

• A retirement account

• A type of capital asset

• A form of inheritance

What is a tax credit?

• An amount of money a taxpayer is allowed to subtract from taxes owed

• A summary of earnings

• A type of retirement account

• A form of capital gain

What is a capital asset?

• Anything of value that is owned

• A type of tax deduction

• A form of income

• A retirement account

What is a short-term capital gain?

• Profit from the sale of an asset held more than a year

• Profit from the sale of an asset held less than a year

• Loss from the sale of a capital asset

• Income from wages

What is self-employment tax?

• Tax on capital gains

• FICA taxes paid by self-employed person

• Tax on inheritance

• Tax on retirement accounts

What is an estate tax?

• Tax on income

• Tax paid out of the value of an estate before transfer to heirs

• Tax on capital assets

• Tax on retirement accounts