Chapter 10 Vocabulary Quiz-Income and Taxes

What is an audit?

• A tax refund

• A penalty for late filing

• An IRS inspection of a tax return

• A method of calculating deductions

What does a capital gains tax apply to?

• The value of inherited land

• The profit from selling an investment

• A gift given over $17,000

• Annual salary income

What is a consumption tax?

• A tax on food only

• A tax on goods and services like sales or excise tax

• A business licensing fee

• A tax on natural resources

What is deficit spending?

• Saving more than you earn

• Government spending financed by borrowing

• A tax refund system

• An investment strategy

What is earned income?

• Money from stocks

• Wages or salary from work performed

• A gift from an employer

• Income from selling real estate

What is an estate tax?

• Tax on annual income

• Tax on inherited gifts

What is an excise tax?

• A tax on essential goods

• A tax on luxury or nonessential items

• A tax on property

• A tax refund for low-income earners

What is a fiscal year?

• January 1 to December 31

• Any 12-month period for financial reporting

• The year you start a job

• The tax payment deadline

What is the gift tax?

• Tax on holiday gifts

• Tax on tips

• Tax on gifts exceeding a certain annual value

• Tax on donated clothing

What is gross income?

• Income after taxes

• Total income before taxes or deductions

• Yearly savings

• Investment returns