Personal Finance

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What is the Standard Deduction?

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A standardized dollar amount that reduces your taxable income, specifically for individuals who do not receive additional benefit by itemizing their deductions.

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What is Medicare?

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A government-run insurance program that provides healthcare assistance to elderly and disabled Americans.

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What is Social Security?

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A federal program that provides monthly benefits to millions of Americans, including retirees, military families, surviving families of deceased workers, and disabled individuals.

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What is a W-4 form?

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A form completed by an employee to indicate his or her tax situation (exemptions, marital status, etc.) to the employer for tax withholding.

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What is Gross Pay?

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The amount people earn per pay period before any deductions or taxes are paid.

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What is Net Pay?

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The amount of money an employee takes home after all deductions and taxes have been subtracted from gross pay.

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What is a Tax Credit?

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An amount of money that taxpayers can subtract directly from the taxes they owe, reducing their overall tax liability.

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What is a Tax Deduction?

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An expense that can be deducted from gross income to reduce the amount of income that is subject to tax.

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What is the difference between Fixed and Variable Expenses?

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Fixed expenses remain constant each month (e.g., rent), while variable expenses can fluctuate (e.g., groceries).

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What is a Budget?

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A financial plan that outlines expected income and expenses over a specific period.