W-2 Form: The W-2 form is the form that an employer must send to an employee and the Internal Revenue Service (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.
W-4: The W-4 is an Internal Revenue Service (IRS) form you complete to let your employer know how much money to withhold from your paycheck for federal taxes. Accurately completing your W-4 can ensure you don't have a big balance due at tax time. It can also prevent you from overpaying your taxes, putting more money in your pocket during the year.
1099 FORM: The 1099 form is a series of documents the Internal Revenue Service (IRS) refers to as "information returns." There are a number of different 1099 forms that report the various types of income you may receive throughout the year other than the salary your employer pays you. The person or entity that pays you is responsible for filling out the appropriate 1099 tax form and sending it to you by
1040EZ: Form 1040EZ is the shortest version of the Internal Revenue Service's (IRS) Form 1040, and it offers a faster and easier way to file income taxes for taxpayers with basic tax situations. In order to be eligible to use this form, filers must have taxable income of less than $100,000, interest income of $1,500 or less and no dependents. Form 1040EZ is also known as the income tax return for single and joint filers with no dependents and unofficially as the easy form.
ALLOWANCES: Employee-claimed exemptions on the tax form employers use to determine how much of an employee’s pay to subtract from his or her paycheck to remit to the tax authorities. The more allowances you claim, the less income tax will be withheld from your paycheck. The fewer allowances you claim, the more income tax will be withheld from each paycheck.
Federal Income taxes: A federal income tax is a tax levied by the United States Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts and other legal entities. Federal income taxes are applied on all forms of earnings that make up a taxpayer's taxable income, such as employment earnings or capital gains.
FICA (Social Security and Medicare): The Federal Insurance Contributions Act is the federal law that requires you to withhold two separate taxes from the wages you earn. It includes Social Security Tax and Medicare Tax at a flat percentage rate. The Social Security Tax is 6.2% rate of your wages, and the Medicare Tax is 1.45% of your wages. If you earn more than $200,000, you will also be taxed an additional 0.9% Medicare surtax.
State Income Tax: Income taxes assessed to a citizen by a state taxing authority agency. This amount varies based on the state the individual resides in, but state income taxes are typically lower than federal income taxes. Tax exemptions and dependents may also reduce the state tax liability for a particular individual
Gross Pay: The total of an employee's regular remuneration including allowances, overtime pay, commissions, and bonuses, and any other amounts, before any deductions are made.
Net Pay: The remaining amount of an employee's gross pay after deductions, such as taxes and retirement contributions, are made.
Year to Date (YTD): The remaining amount of an employee's gross pay after deductions, such as taxes and retirement contributions, are made.
Hourly vs Salary: The remaining amount of an employee's gross pay after deductions, such as taxes and retirement contributions, are made.
Deductions: A deduction is any item or expenditure subtracted from gross income to reduce the amount of income subject to income tax. It is also referred to as an "allowable deduction." For example, if you earn $40,000 and claim a deduction for $1,000, then your taxable income is reduced to $39,000.
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