Download Tax A sum of money demanded by a government for its support or

Terms to Know for Filing Taxes
CFM – Mr. Gault
Name _______________________________
Date ___________
Tax
A sum of money demanded by a government for its support or for specific facilities or services, levied
upon incomes, property, sales, etc.
W-4 Form
A form completed by an employee to indicate his or her tax situation (exemptions, status, etc.) to the
employer. The W-4 form tells the employer the correct amount of tax to withhold from an employee's
paycheck.
W-2 Form
The form that an employer must send to an employee and the IRS at the end of the year. The W-2 form
reports an employee's annual wages and the amount of taxes withheld from his or her paycheck.
1099 Form
Interest and dividend payments of $10 or more
1040EZ Form
The 1040EZ is an alternative to the Internal Revenue Service's (IRS) 1040 income tax form and offers a
faster and easier way to file taxes, meant for taxpayers with rudimentary tax situations.
IT-201 Form
Resident Income Tax Return for Full-Year State Residents Only
Federal Income Tax Withheld
Money that employers withhold from employees' paychecks for the US government.
State Income Tax Withheld
Money that employers withhold from employees' paychecks for the NYS government.
Filing Status (give examples)
Your filing status is used to determine your filing requirements, standard deduction, eligibility for certain
credits, and your correct tax. If more than one filing status applies to you, choose the one that will result
in the lowest amount of tax. There are five filing statuses: Single, Married Filing Jointly, Married Filing
Separately, Head of Household, and Qualifying Widow(er) with Dependent Child.
Dependent
A person, other than the taxpayer or the taxpayer's spouse, for whom an exemption can be claimed. To
be your dependent, a person must be your qualifying child or qualifying relative.
Standardized deductions
A deduction that reduces the amount of income on which you are taxed. You cannot take the standard
deduction if you claim itemized deductions. Your standard deduction consists of the basic standard
deduction amount based on your filing status and additional standard deduction amounts for age and
blindness.
Itemized Deductions
Deductions allowed on Schedule A (Form 1040) for medical and dental expenses, taxes, home mortgage
interest and investment interest, charitable contributions, casualty and theft losses, and miscellaneous
deductions. They are subtracted from adjusted gross income in figuring taxable income. Itemized
deductions cannot be claimed if the standard deduction is chosen.
Wages, Salaries, Tips etc. …
Money that is paid or received for work or services, as by the hour, day, or week to be reported as income
for the year.
Taxable Interest
Income a person receives from certain financial accounts or from lending money to someone else.
Dividends
A distribution of money or other property made by a corporation to its shareholders out of its earnings
and profits.
Alimony
Payment to a spouse or former spouse under a divorce or separation instrument. The payments do not
have to be made directly to the ex-spouse. The person paying alimony can subtract it as an adjustment to
income; the person receiving alimony must treat it as income
Child Care Expenses
A nonrefundable credit that allows taxpayers to claim a credit for paying someone to care for their
qualifying Dependents under the age of 13 or Spouses or dependents who are unable to care for
themselves.
Business Income/Loss
Money made by your business that either netted a profit or a loss
Capital Gain/Loss
When a capital asset is sold (house, artifacts), the difference between what you paid for the asset and the
amount it is sold for is a capital gain or a capital loss.
IRA
Individual Retirement Account – money set aside to be used once you retire. This money is usually put
into a specific investment like 401k funds.
Pensions/Annuities
A regular payment made during a person's retirement from an investment fund to which that person or
their employer has contributed during their working life
Real Estate
Property consisting of land or buildings
Public Employee 414(h) Retirement Contributions
A monetary contribution to a retirement plan.
Adjusted Gross Income
Total income reduced by certain amounts such as contributions made to a traditional IRA or for student
loan interest payments that an individual pays federal and state taxes on.
Tax Credit
A direct reduction of the taxpayer's liability. Credits are allowed for such purposes as child care expenses,
higher education costs, qualifying children, and earned income of low-income taxpayers.
Exemptions
Amount that taxpayers can claim for themselves, their spouses, and eligible dependents. The total is
subtracted from adjusted gross income before tax is figured on the remaining income (taxable income).
Taxable Income Gross
Income minus any adjustments to income, any allowable exemptions, and either itemized deductions or
the standard deduction.
Tax Tables
A table or chart displaying the amount of tax due based on income received. The tax rate may be shown
as a discrete amount, a percentage rate, or a combination of both. Tax tables are used by individuals,
companies and estates for both standard income and capital gains.