pp.137-156. child support the ability to pay
TRANSCRIPT
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Chapter 7 Reviewpp.137-156
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Child support
Money paid to a former spouse for support of dependent children is called…
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The ability to pay
A tax theory that states individuals with high income should pay more taxes than people with low incomes.
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Regressive
Almost all consumption taxes are….
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Excise taxes
Sales taxes imposed on specific goods and services such as tobacco are…
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Regressive
Excise taxes are …
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Congress National defense Highways Wildlife refuges Welfare Foreign aid
Federal taxes provide funds for…
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Proportional Taxes
Taxes for which the rate stays the same regardless of income are….
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Progressive tax
Federal Income tax is an example of …
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It must pass a vote in both the House and Senate and then be signed by the President.
How does a revenue bill become a law?
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revenue
The government spends_______ according to priorities set by congress.
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Collect Income taxes Enforce tax laws
What are the main functions of the IRS?
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Congress
Who has the power to levy taxes?
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Earned income
Money received from working…
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Ranges of income
What is a tax bracket?
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Deficit/shortage
When the government spends more than it receives in revenue it has a…
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Flat taxes
Another name for proportional taxes are…
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Regressive taxes
These types of taxes take a smaller portion of your income as your income grows…
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Voluntary Compliance
The idea that citizens are expected to prepare and file tax returns of their own accord without force is referred to as…
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Internal Revenue Service
IRS stands for…
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Businesses Individuals
Who pays taxes?
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Regressive
Sales tax is an example of this kind of tax…
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dependent
A person who lives with you and for whom you pay more than half of their living expenses….
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Evasion
Willful failure to pay taxes is called…
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Proportional/flat
Property tax is an example of this kind of tax….
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Fine Imprisonment both
The punishment for not paying taxes is..
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Progressive taxes
These types of taxes take a larger portion of your income as your incomes grows.
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Audit
An examination of your tax returns by the IRS is an…
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1040A
Which tax form must you fill out if you want to itemize deductions?
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Tax rates increase as taxable income increases
Our tax system is graduated. What does this mean?
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alimony
Money paid to a former spouse is called…
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Office
In this type of audit the taxpayer sits down with the auditor to answer questions and produce records.
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Adjusted gross income
You are allowed to subtract some types of spending from your gross income to determine your…
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Correspondence
In this type of audit the IRS sends a letter, asking the taxpayer to respond to specific questions or produce evidence of deductions or other entries on the tax return.
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Field
In this type of audit, the IRS agent visits the taxpayers home or business to examine records.
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Filing status
This is based on your marital status as of the last day of the tax year…
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Single Married filing a joint return Married filing a separate return Head of Household Qualifying widow
Give an example of filing status…
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Each employer you had for the year
Where do W-2’s come from?
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Exemption
The amount of money you may subtract from your income for each person who depends on your income.
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spouse
If you are filing a joint return you can take an exemption for your…..
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Salaries Wages Tips Taxes withheld
What kind of information is on the W-2?
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1040EZ 1040A
Most new tax payers use one of two forms, what are they?
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Wages Salary Tips
An example of earned income is…
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Interest Dividends Alimony Unemployment Workers compensations Scholarships Grants
An example of unearned income is…
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Non-taxable income◦ Child support◦ Gifts◦ Inheritances◦ Life Insurance benefits◦ Veterans benefits
Give an example of income that is not taxable…
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Gross Income
All taxable income received…
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Tax deduction is subtracted from adjusted gross income
Tax credit is subtracted from what you owe
What is the difference between a tax credit and a tax deduction?
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Unearned income
Money you received from a passive activity…
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Itemized deductions
Expenses you can subtract from adjusted gross income to determine your taxable income are…
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Standard deduction
Instead of itemizing your deductions you can take the…..
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Standard deduction
A stated amount you may subtract form adjusted gross income is…
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Taxable income
Income on which you pay tax…
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Tax credit
Amount subtracted directly from the tax owed…
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April 15
When must you file your taxes by?
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6 years
How long should you keep copies of your tax returns and related documents?
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Education Parks Roads Police, fire, health departments
Local taxes provide funds for…
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Study!!!!!!