Taxes, Tax-related vocabulary 3
📚 Key vocabulary
taxable income — the portion of income on which taxes are calculated, after allowable deductions and exemptions
withholding tax — income tax deducted directly from an employee's wages before they receive payment
tax deduction — an expense that reduces taxable income, thereby lowering the amount of tax owed
tax credit — a direct reduction in the amount of tax owed, more valuable than a deduction of the same amount
VAT (Value Added Tax) — a consumption tax levied at each stage of production or distribution, passed on to the final consumer
corporate tax — a tax levied on a company's profits by the government
audit (tax) — an official examination of an individual's or company's tax return by a government authority
capital gains tax — a tax on the profit from selling an asset such as shares, real estate, or a business
tax haven — a jurisdiction with very low tax rates that attracts businesses and individuals seeking to reduce tax liability
double taxation — the taxation of the same income twice, often applied when multinational companies operate across jurisdictions
taxable income — the portion of income on which taxes are calculated, after allowable deductions and exemptions
withholding tax — income tax deducted directly from an employee's wages before they receive payment
tax deduction — an expense that reduces taxable income, thereby lowering the amount of tax owed
tax credit — a direct reduction in the amount of tax owed, more valuable than a deduction of the same amount
VAT (Value Added Tax) — a consumption tax levied at each stage of production or distribution, passed on to the final consumer
corporate tax — a tax levied on a company's profits by the government
audit (tax) — an official examination of an individual's or company's tax return by a government authority
capital gains tax — a tax on the profit from selling an asset such as shares, real estate, or a business
tax haven — a jurisdiction with very low tax rates that attracts businesses and individuals seeking to reduce tax liability
double taxation — the taxation of the same income twice, often applied when multinational companies operate across jurisdictions
READY TO PRACTICE? LET’S GO!
Match each definition with the letter of one of the following:
a - deduction b - itemized deduction c - expenses d - tax bracket e - property tax f - tax shelter g - capital gains h - garnishment i - refund j - tax liability
1. the amount of tax that you have to pay → ✓
2. a list of deductions from taxable income → ✓
3. money that you make from stocks, bonds, real estate, etc. → ✓
4. in tax terms, the cost of maintaining property or generating income → ✓
5. money that the government gives back to you when you pay too much in taxes, or have withheld too much from your salary → ✓
6. when someone withholds your wages to pay off your debt to a third party → ✓
7. an expense that you can subtract from your gross income → ✓
8. a tax that has to be paid by owners of houses, etc. → ✓
9. a financial arrangement which can reduce your tax liability → ✓
10. a category of taxpayers, defined by how much money they make → ✓
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