12-2

Question 1

payroll taxes

Answer 1

Taxes based on the payroll of a business

Question 2

payroll deduction

Answer 2

Any amount withheld from an employee’s gross earnings

Question 3

withholding allowance

Answer 3

A deduction from total earnings for each person legally supported by a taxpayer, including the employee.

Question 4

social security tax

Answer 4

A federal tax paid for old-age, survivors, and disability insurance.

Question 5

Medicare tax

Answer 5

A federal tax paid for hospital insurance.

Question 6

accumulated earnings

Answer 6

The total gross earnings year to date for an employee.

Question 7

tax base

Answer 7

The maximum amount of earnings on which a tax is calculated.

Question 8

qualified retirement plan

Answer 8

A retirement savings plan approved by the Internal Revenue Service that provides individuals with a tax benefit.

Question 9

401(k)

Answer 9

A qualified retirement plan sponsored by an employer.

Question 10

individual retirement account (IRA)

Answer 10

A qualified retirement plan that provides most individuals with a deferred federal income tax benefit.

Question 11

Roth individual retirement account (Roth IRA)

Answer 11

A qualified retirement plan that allows tax-free withdrawals from the account.