Unit 4

Question 1

Wages

Answer 1

a fixed amount of money paid to an employee on a regular basis such as weekly, bi-weekly or monthly

Question 2

Salaried

Answer 2

an employee is paid a set amount for a specific period of time (weekly/monthly/annually, etc) regardless of the number of hours they work; sometimes this type of position is referred to as “exempt” because this type of position does not regularly pay overtime

Question 3

Hourly

Answer 3

employee is paid a set rate according to the number of hours they work; some employers will refer to this type of position as “nonexempt” because hourly employees qualify for overtime rate increases

Question 4

Commision

Answer 4

a fee that a salesperson receives upon completion of a sale

Question 5

Freelance

Answer 5

a self-employed individual not usually connected with an employer

Question 6

Apprenticeship

Answer 6

a position in which someone learns an art, trade, or job from someone else

Question 7

Undergraduate degree

Answer 7

A bachelor’s degree

Question 8

Graduate Degree

Answer 8

A Masters or doctorate degree

Question 9

Professional License and Certification

Answer 9

a regulated and official process for ensuring individuals meet the necessary skills and knowledge for a particular job or field

Question 10

Tuition

Answer 10

the sum of money charged at an institution for instruction; it is not the only cost for attendance (sticker price for an education)

Question 11

GI Bill

Answer 11

GI Bill benefits help you pay for college, graduate school, and training programs. Since 1944, the GI Bill has helped qualifying Veterans and their family members get money to cover all or some of the costs for school or training.

Question 12

Gap Year

Answer 12

a year taken between high school and college to pursue career-related training or experience

Question 13

Student Loans

Answer 13

If you decide to take out a loan, make sure you understand who is making the loan and the terms and conditions of the loan. Student loans can come from the federal government, from private sources such as a bank or financial institution, or from other organizations. Loans made by the federal government, called federal student loans, usually have more benefits than loans from banks or other private sources.

Question 14

Scholarships

Answer 14

based on achievements and help pay for educational expenses, some scholarships may have specific requirements of how the money may be applied such as toward tuition only

Question 15

Grants

Answer 15

a tax-exempt financial aid that may be given for many purposes, not necessarily for education

Question 16

Co-signing loans

Answer 16

puts the consignor equally responsible for paying back debt under the credit terms

Question 17

Fellowships

Answer 17

a merit-based scholarship for advanced education in a specific field; many are competitive, but can help fund advanced degrees and requirements vary widely

Question 18

Economic Sustainability

Answer 18

college degree holders are less likely to be unemployed and are more likely to have a higher earning potential

Question 19

Economic Mobility

Answer 19

holding a college degree can offer many the opportunity to make more than earlier generations of their family

Question 20

Trends in the workplace since 2020

Answer 20

many employers have begun to focus on the well-being of their employees, employers are also more willing to address social issues, Remote and hybrid work has increased in white collar fields , Many employers hold a favorable bias toward in-office employees when hybrid work is an option , Concerns over employee flexibility in not just location, but time will continue to be a debate

Question 21

Education Options

Answer 21

college/university, Trade school, Technical school, Military, Work

Question 22

General Career Option Categories

Answer 22

Military, Corporate business, Non-profit, Service industry, Manufacturing industry, Tech Industry, Academia, Research, Entrepreneurship, Fortune 500, Public Service, Skilled labor, Unskilled labor

Question 23

In-state tuition vs. Out of state tuition

Answer 23

public institutions offer lower tuition rates for in-state students; individual states have different requirements to prove residency in-state

Question 24

Vocational Training Programs

Answer 24

the entire cost is generally the same as the average cost of one year of college expenses; it usually takes less time to complete this course of study, getting attendees into the workforce sooner

Question 25

Community College

Answer 25

these institutions have some of the lowest tuition costs and many students are able to live from home while attending, saving additional money

Question 26

Tuition and Fees

Answer 26

these college-related costs are standard for all students attending an institution (with a few exceptions); tuition rates vary widely

Question 27

Books/Supplies

Answer 27

these costs add up and the average expense is over $1200/year; buying used books, comparison shopping, and borrowing books can save you money

Question 28

Housing

Answer 28

the cost of living arrangements vary considerably; on campus housing is usually a more expensive option for housing, but is more convenient. Some colleges will require new students to live on campus unless they live within a certain radius of a school. Renting an apartment can be less expensive, but comes with more work. Living at home is the cheapest option.

Question 29

Campus Meal Plans

Answer 29

colleges offer meal plans to full and part time students who live on and off campus; the price per meal is relatively expensive compared to carefully budgeting your food expenses and cooking yourself; many offer different dining options

Question 30

Return on Investment

Answer 30

as a general guideline your monthly loan repayment should be around 10-15% of your expected income at the time you are expected to begin repayment on your loan

Question 31

529 College Savings Plan

Answer 31

A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.

Question 32

529 Prepaid tuition plan

Answer 32

Prepaid tuition plans allow parents, grandparents and others to prepay tuition at today’s tuition rates at eligible public and private colleges or universities, helping them manage future tuition costs.

Question 33

Education Savings account

Answer 33

often a supplement plan; this program allows savings for educational expenses from kindergarten through college; savings are tax-deferred as long as finds goto educational expenses

Question 34

Uniform Gifts to Minors Act

Answer 34

allows money and financial securities to be transferred to minors through a UGMA account and is allowed in all states. The donor or a custodian manages the property for the minor's benefit until the minor reaches a certain age.

Question 35

Roth Individual Retirement Account

Answer 35

families can use their Roth IRA’s to save additional money for college; these can count as income when taken out for college and could alter financial aid packages or eligibility and the limit on contributions is low for this type of savings

Question 36

AP

Answer 36

a highly rigorous course, students take the annual Advanced Placement Exam which determines if students will be awarded college credits; different colleges have different policies on required scores on these exams to count toward college requirements; the cost is much lower that the tuition for these credits in college and these courses look good on a college application due to their rigor

Question 37

IB

Answer 37

students commit to taking a minimum number of courses for the diploma distinction and credit is granted by universities based on exam scores; these programs tend to be smaller than AP and are not as common throughout the country

Question 38

Early College

Answer 38

students can earn an associates and high school diploma in 4-5 years; costs are covered for tuition, expenses, and textbooks provided guidelines are followed; offer preferential admission to state colleges and universities, dependent on GPA

Question 39

Dual Enrollment

Answer 39

courses that grant high school and college credit; many of the courses taken at MCC are considered this

Question 40

Transfer Process

Answer 40

Early College students will not apply to college as a transfer; some students can find their college is not a good fit for them, do not feel their program is strong enough, or were rejected from their first choice school; each college has a different process, so do your research and keep deadlines in mind; you will need recommendations from your college professors and keep costs in mind

Question 41

Free Application for Federal Student Aid (FAFSA)

Answer 41

this form determines eligibility for post-secondary financial aid; some scholarships may require you to complete this form for disbursement of funds (especially federal and state-sponsored scholarships and awards)

Question 42

Scholarships vs. Loans

Answer 42

scholarships are awards that do not need to be repaid, they are based on achievements and help pay for educational expenses, some scholarships may have specific requirements of how the money may be applied such as toward tuition only; loans require repayment

Question 43

Federal subsidized loans

Answer 43

a need-based loan from the federal government; the interest is paid by the government while a student is enrolled, during grace periods, and deferment periods

Question 44

Internships

Answer 44

sometimes internships offer stipends or payment which help offset expenses; they offer on-the-job training and allow for individuals to be mentored and make connections with people in the job field

Question 45

Grants

Answer 45

a tax-exempt financial aid that may be given for many purposes, not necessarily for education

Question 46

Fellowships

Answer 46

a merit-based scholarship for advanced education in a specific field; many are competitive, but can help fund advanced degrees and requirements vary widely

Question 47

Full/Part-time work

Answer 47

this income can help to pay for expenses

Question 48

Student Work Study

Answer 48

a federal program that provides part time employment opportunities to students with financial need, allowing them to help pay educational expenses

Question 49

Consolidating Loans

Answer 49

combining a number of financial accounts or funds into a single overall account or set of accounts

Question 50

Earned Income

Answer 50

taxable wages from working for someone else

Question 51

Net Income

Answer 51

your take home pay after all deductions

Question 52

Adjusted Gross Income

Answer 52

gross income after calculating certain reductions known as adjustments

Question 53

Paychecks

Answer 53

wages or salary statement

Question 54

Self-Employment

Answer 54

someone who earns their income through independent economic activity (as opposed to through an employer)

Question 55

"Gig" Economy

Answer 55

flexible, temporary, or freelance jobs; now this is often done through online platforms

Question 56

Passive Income

Answer 56

regular earnings from a source other than an employer or contractor

Question 57

Capital Gains

Answer 57

the increase in a capital asset’s value and is realized when the asset is sold (sale price-initial cost)

Question 58

Entitlements

Answer 58

a relationship between an individual (e.g. leasor) and a regular flow of income or asset

Question 59

Side Hustle

Answer 59

a secondary business or job that brings in additional income

Question 60

Investments

Answer 60

assets purchased with the goal of providing additional income from the asset itself but with the risk of loss

Question 61

Equity

Answer 61

the value of an asset after liabilities are deducted from it (value-unpaid debt on purchase)

Question 62

Dividend

Answer 62

the share of profits distributed in cash

Question 63

Rentals

Answer 63

an example of an entitlement

Question 64

Pre-tax deductions

Answer 64

lower an individual’s taxable income

Question 65

Post-tax deductions

Answer 65

these are deducted from an individual’s net income; they do not lower an individual’s tax responsibility directly

Question 66

Gross income

Answer 66

your pay before deductions

Question 67

Federal Insurance Contributions Act (FICA)

Answer 67

this includes Social Security and Medicare Taxes

Question 68

Medicare/Medicaid

Answer 68

up to a certain amount is subject to this tax and is taxed at a 1.45% rate (this is included in FICA)

Question 69

Social Security

Answer 69

up to a certain amount is subject to this tax and is taxed at a 6.2% rate (this is included in FICA

Question 70

401K

Answer 70

retirement savings plan funded by deductions from your paycheck

Question 71

403B

Answer 71

a retirement savings plan for those employed by a tax-exempt institution (hospitals and nonprofits)

Question 72

529

Answer 72

A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs; individuals can elect to have a direct deduction from their payroll

Question 73

Pensions

Answer 73

employee benefit that requires an employer to make regular contributions to a pool of money meant to fund eligible employees during retirement; many employers offer “matching programs” where employees are eligible for higher payouts in retirement through larger contributions while employed; these are deducted from paychecks

Question 74

Health Insurance

Answer 74

these are deducted directly if you elect this benefit from your employer/it is offered; this is usually a percentage of costs or set amount taken from each pay cycle

Question 75

Federal income tax

Answer 75

federal income taxes are assessed using a graduated system; taxpayers fall in brackets based on their adjusted income and pay at the rate of their bracket; higher brackets pay higher rates of income tax

Question 76

State income tax

Answer 76

North Carolina assesses a flat rate income tax

Question 77

Retirement accounts

Answer 77

other types of retirement accounts are also usually deducted directly from your paycheck

Question 78

Roth & Traditional Individual Retirement Account (IRA)

Answer 78

a special account in which a person saves a portion of their income for retirement (traditional can sometimes be tax-deductible, Roth’s are not tax-deductible)

Question 79

Flexible Savings Account for Healthcare

Answer 79

an elected pre-tax deduction for eligible healthcare expenses; if you don’t use it, you lose it at the end of the calendar year; shields income from taxes

Question 80

Flexible Savings account for childcare

Answer 80

an elected pre-tax deduction taken from your paycheck; cannot be combined with childcare credits on taxes which usually benefit most families more than this program

Question 81

Union dues

Answer 81

dues are usually taken out either as a straight fee or percentage of your income for union members that is paid to the union

Question 82

Deductions vs. exemptions

Answer 82

deductions are items you can claim to reduce tax liability but exemptions are people you claim to reduce tax liability

Question 83

W-4 form

Answer 83

federal tax form you complete at the start of employment that claims your allowances for payroll taxes

Question 84

Income tax

Answer 84

a tax on earned and unearned income; this is paid annually to the federal and state governments

Question 85

federal taxes

Answer 85

federal income taxes are assessed using a graduated system; taxpayers fall in brackets based on their adjusted income and pay at the rate of their bracket; higher brackets pay higher rates of income tax; tariffs and excise taxes are also collected, but are not directly seen by consumers because they are included in their price

Question 86

State taxes

Answer 86

North Carolina assesses a flat rate income tax and collects sales tax; there are other taxes that are collected but these are two of the larger revenue pools

Question 87

payroll tax

Answer 87

a tax on earned income that is applied to your income taxes

Question 88

Capital gains taxes

Answer 88

taxes owed on the sale of an asset (sale price-initial cost); the rate varies considerably depending on your income

Question 89

Estate Taxes

Answer 89

a tax on the right to transfer property upon your death when it is transferred to an heir; this is taken from the estate whereas an inheritance tax is deducted when it is transferred to an heir

Question 90

Property Taxes

Answer 90

a tax on property such as land, buildings (including homes), and automobiles; these are aid to local or state governments

Question 91

Local Taxes

Answer 91

localities charge taxes as well on property and charge sales tax; some cities may also levy taxes to pay for city services

Question 92

Sales Taxes

Answer 92

a tax on purchased goods and services; these are collected by state and local governments (counties and cities/towns) for most purchases

Question 93

Excise taxes

Answer 93

taxes collected from the seller or retailer; they often remain hidden in the price of the product or service, rather than being listed separately

Question 94

Inheritance/gift taxes

Answer 94

this is only incurred at the federal level in North Carolina and over $11.7 million dollars (although this is subject to change); gifts can be taxed and when given sometimes a deduction on taxes although this is more complicated

Question 95

Expenditures

Answer 95

​​special provisions of the tax code such as exclusions, deductions, deferrals, credits, and tax rates that benefit specific activities or groups of taxpayers.

Question 96

Entertainment taxes

Answer 96

sometimes referred to as "amusement tax" is any tax levied on any form of commercial entertainment

Question 97

Luxury taxes

Answer 97

a sales tax or surcharge levied only on certain products or services that are deemed non-essential or accessible only to the super-wealthy

Question 98

Corporation taxes

Answer 98

a tax on the profits of a corporation

Question 99

Wealth taxes

Answer 99

imposed on an individual's net wealth, or the market value of their total owned assets minus liabilities

Question 100

Budgets

Answer 100

Every year, Congress begins work on a federal budget for the next fiscal year. The federal government’s fiscal year runs from October 1 of one calendar year through September 30 of the next. The president submits his budget proposal to Congress early the next year.

Question 101

Federal agency funding/discretionary spending

Answer 101

the area Congress sets annually. Discretionary spending typically accounts for around a third of all funding.

Question 102

Deficit

Answer 102

when expenses exceed revenue and indicate the financial health of a country. The government generally uses the term budget deficit when referring to spending rather than businesses or individuals. Accrued deficits form national debt.

Question 103

National Debt

Answer 103

the level of federal debt owed to creditors, which includes debt held by the public and intragovernmental debt.

Question 104

1040

Answer 104

this is the long form of income taxes; people who qualify for the simplified forms often find additional tax benefits in completing this form; anyone with an income over $100,000, interest and dividends over a set limit, self-employed individuals, or income from property sales must complete this form otherwise you can complete a 1040A

Question 105

NC-40

Answer 105

North Carolina’s state income tax form

Question 106

W-2

Answer 106

an annual statement of earnings and payroll deductions used to complete income taxes

Question 107

W-4

Answer 107

federal tax form you complete at the start of employment that claims your allowances for payroll taxes

Question 108

1099

Answer 108

provides a statement of income not from an employer for such income over $600

Question 109

1099-INT

Answer 109

provided a statement of interest earned on investments and savings, which is added to your income

Question 110

1098-E

Answer 110

provides a summary of interest paid on student loans, which can be deducted from your adjusted income

Question 111

1098-INT

Answer 111

provides a statement of interest paid on a mortgage, which can be deducted from your income (property taxed can also used as a deduction on federal income taxes)

Question 112

Tax credit

Answer 112

the amount of money that can be directly subtracted from the taxes your owe

Question 113

Allowance

Answer 113

an adjustment to the tax withheld from your paycheck such as marital status and number of dependents

Question 114

Exemptions

Answer 114

a deduction from adjusted gross income for the taxpayer, the spouse, and qualified dependents