H&R Block Income Tax Course Terms (1)
Adjusted gross income - answer This equals gross income less reductions that are
allowable, regardless of whether personal deductions are itemized.
Credits - answer Reductions of tax liability allowed for various purposes to tax payers
who meet the qualifications. Some of "these" are 'refundable'; that is, the IRS will send
the taxpayer a refund for any amount in excess of the tax liability. Some credits are
'nonrefundable'; that is, they can only reduce tax liability to zero. Some of these may be
carried to other tax years.
Earned Income - answer Income from personal services as distinguished from income
generated by property or other sources. Earned income includes received as wages,
tips, bonuses, other employee compensation, and self-employment income, whether in
the form of money, services, and property.
Exemption - answerAn amount ($3,950 for 2014) allowed by law as a reduction of
income, that would otherwise be taxed.
Federal Income Tax Withheld - answerThe amount taken out of income by the payer
and submitted to the IRS as an advance payment of the taxpayer's federal income tax.
Gross Income - answerTotal worldwide income received in the form of money, property,
or services that is subject to tax.
Income - answerThis the gain derived from capital, labor, or a combination of the two. It
is distinguishable from the capital itself. Ordinarily, for income tax purposes, this word is
not used alone. Rather it is used within such descriptive terms as 'gross income',
'taxable income', and 'adjusted gross income' which can be otherwise located and
defined in a glossary.
Medicare Part A - answerThis specific tax is taken out of an employees wages, or the
same tax paid by a self-employed person on net self-employment income. This specific
tax rate is 1.45% of gross wages (2.9% for self-employed individuals).
Social Security Tax Withheld - answerThe employee's share of social security tax that
was taken out of an employee's pay and submitted along with the employer's share to
the IRS by the employer. The employee pays 4.2% and the employer pays 6.2% of the
first $117,000 of the employee's gross wages for (2014).
Social Security Wages - answerTotal wages paid to an employee that are subject to this
tax. This amount does not include tips. Wages are also subject to Medicare tax.
Adjusted gross income - answer This equals gross income less reductions that are
allowable, regardless of whether personal deductions are itemized.
Credits - answer Reductions of tax liability allowed for various purposes to tax payers
who meet the qualifications. Some of "these" are 'refundable'; that is, the IRS will send
the taxpayer a refund for any amount in excess of the tax liability. Some credits are
'nonrefundable'; that is, they can only reduce tax liability to zero. Some of these may be
carried to other tax years.
Earned Income - answer Income from personal services as distinguished from income
generated by property or other sources. Earned income includes received as wages,
tips, bonuses, other employee compensation, and self-employment income, whether in
the form of money, services, and property.
Exemption - answerAn amount ($3,950 for 2014) allowed by law as a reduction of
income, that would otherwise be taxed.
Federal Income Tax Withheld - answerThe amount taken out of income by the payer
and submitted to the IRS as an advance payment of the taxpayer's federal income tax.
Gross Income - answerTotal worldwide income received in the form of money, property,
or services that is subject to tax.
Income - answerThis the gain derived from capital, labor, or a combination of the two. It
is distinguishable from the capital itself. Ordinarily, for income tax purposes, this word is
not used alone. Rather it is used within such descriptive terms as 'gross income',
'taxable income', and 'adjusted gross income' which can be otherwise located and
defined in a glossary.
Medicare Part A - answerThis specific tax is taken out of an employees wages, or the
same tax paid by a self-employed person on net self-employment income. This specific
tax rate is 1.45% of gross wages (2.9% for self-employed individuals).
Social Security Tax Withheld - answerThe employee's share of social security tax that
was taken out of an employee's pay and submitted along with the employer's share to
the IRS by the employer. The employee pays 4.2% and the employer pays 6.2% of the
first $117,000 of the employee's gross wages for (2014).
Social Security Wages - answerTotal wages paid to an employee that are subject to this
tax. This amount does not include tips. Wages are also subject to Medicare tax.
