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HRB-02 Wages Income & Taxes question and answers rated A+2024/2025
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HRB-02 Wages Income & Taxes question and answers rated A+2024/2025
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HRB-02 Wages Income & TaxesAdjusted Gross Income (AGI) - ANSAdjusted gross profits equals gross income LESS discounts
which might be allowable, irrespective of whether non-public deductions are itemized.
Credits (Refundable) - ANSCredits in which the IRS will send the taxpayer a REFUND for any
quantity in excess of the tax liability.
Credits (Nonrefundable) - ANSCredits which can handiest reduce tax legal responsibility to
ZERO. Some credit may be carried to different tax years.
Earned Income - ANS• Income from PERSONAL SERVICES as distinguished from income
generated by using assets or different sources.
• Includes all quantities acquired as wages, recommendations, bonuses, other employee
reimbursement, and self-employment income, whether or not in the form of money, services or
property.
Exemption - ANS$three,650 for 2009, allowed via regulation as a discount of income that could
otherwise be taxed.
Federal Income Tax Withheld - ANSThe quantity taken out of profits by using the payer and
submitted to the IRS as an enhance payment of the taxpayer's federal profits tax.
Gross Income - ANSTotal WORLDWIDE profits obtained within the shape of cash, belongings,
or offerings that is SUBJECT TO TAX.
Income - ANSThe benefit derived from capital, hard work or a combination of the two. It is
distinguishable from the capital itself.
Medicare Part A - ANSThe medicare tax taken out of an worker's wages or the same tax paid
via a self-hired man or woman on internet self-employment income. The medicare A tax fee is
1.45% of gross wages (2.Nine% for self-employed individuals).
Social Security Tax Withheld - ANS• Employee's proportion of social security tax that turned into
taken out of the worker's pay and submitted at the side of the organisation's percentage to the
IRS via the employer.
• Both the worker and the organization pay 6.2% of the primary $106,800 of the worker's gross
wages (for 2009).
Tax Liability - ANSThe quantity of general tax due the IRS after any credits and earlier than
taking into consideration any improve payments (withholding, predicted bills, and so on.) made
by the taxpayer.
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