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Chapter 2 - income The tax rate increases as income...

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Chapter 2: Net Income 1. Net income : your take-home pay after all tax withholdings and personal deductions have been taken from your gross income. 2. federal income tax : a specified amount that is to be withheld from your pay. 3. Withholding allowances : you can claim one allowance for yourself, one allowance for your spouse, and any additional allowances for any others you support. 4. personal exemptions : or withholding allowances, allowed for supporting yourself and others in your family. 5. graduated income tax : involves a different tax rate for each of several levels of
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Unformatted text preview: income. The tax rate increases as income increases. 6. social security : 6.2% is deducted on the first $62,700 of incomes. It is used for retirement and disability benefits. 7. medicare : 1.45% is paid on all your earnings. It is used for hospitalization insurance. 8. group insurance : insurances offered to a group at a lower cost. The employer pays part of the cost and the rest is deducted from your pay. 9. net pay : subtract your total deductions from your gross pay....
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