Wise Practice Test – Taxes
excise tax
government imposes a tax on specific goods and services such as alcohol, cigarettes, gasoline, and
airline
Capital Gains Tax
If held over one year are considered long-term capital gains and are taxed at a lower tax rate or in
some cases are not taxed at all.
Financial planning
the process of developing and implementing a coordinated series of actions to achieve financial
success.
Social Security
benefits depends on the person?s earnings over a lifetime of work
Garnishment
Occurs when a creditor obtains a court order requiring an employer to attach an employee's earnings
in order to pay back a debt.
cash value for whole life insurance
Policy that accumulates cash value is more expensive than a policy that does not accumulate cash
value
deductible
the amount of money that the policy holder pays when a claim is settled.
No insurance
First get insurance against Losses resulting from an illness, accident, or disability
Sources of Income
Allowance, salary, interest, dividends/investments, inheritance/gifts, retirement, and social security.
exemption
A deduction allowed by law to reduce the amount of income that would otherwise be taxed. An
exemption is based on a status or circumstance rather than economic standing.
Discretionary income
Disposable income available for spending and saving after an individual has purchased the basic
necessities of food, clothing, and shelter
US Treasury Department
Determines the quantity and types of government securities it must issue to meet federal budget
needs; the marketplace determines the interest rates those securities will pay;Determines the
excise tax
government imposes a tax on specific goods and services such as alcohol, cigarettes, gasoline, and
airline
Capital Gains Tax
If held over one year are considered long-term capital gains and are taxed at a lower tax rate or in
some cases are not taxed at all.
Financial planning
the process of developing and implementing a coordinated series of actions to achieve financial
success.
Social Security
benefits depends on the person?s earnings over a lifetime of work
Garnishment
Occurs when a creditor obtains a court order requiring an employer to attach an employee's earnings
in order to pay back a debt.
cash value for whole life insurance
Policy that accumulates cash value is more expensive than a policy that does not accumulate cash
value
deductible
the amount of money that the policy holder pays when a claim is settled.
No insurance
First get insurance against Losses resulting from an illness, accident, or disability
Sources of Income
Allowance, salary, interest, dividends/investments, inheritance/gifts, retirement, and social security.
exemption
A deduction allowed by law to reduce the amount of income that would otherwise be taxed. An
exemption is based on a status or circumstance rather than economic standing.
Discretionary income
Disposable income available for spending and saving after an individual has purchased the basic
necessities of food, clothing, and shelter
US Treasury Department
Determines the quantity and types of government securities it must issue to meet federal budget
needs; the marketplace determines the interest rates those securities will pay;Determines the
