Taxes, Tax-related vocabulary 3

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Match each definition with the letter of one of the following:
a - deduction
b - itemized deductions
c - expenses
d - tax bracket
e - property tax
f - tax shelter
g - capital gains
h - garnishment
i - refund
j - tax liability

1. the total amount of tax a person or business owes → ✓

2. individual eligible expenses listed separately to reduce taxable income → ✓

3. profits earned from selling investments or other assets → ✓

4. costs incurred in maintaining property or generating income → ✓

5. money returned after too much tax has been paid or withheld → ✓

6. the legal withholding of wages to repay a debt → ✓

7. an eligible amount subtracted when calculating taxable income → ✓

8. a tax charged on real estate or other property → ✓

9. a legal arrangement designed to reduce tax liability → ✓

10. a range of taxable income subject to a particular tax rate → ✓

📚 Important Words to Know
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