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Some of Those Tax Terms- What Do They Mean?

February 8, 2010

Taxable Earnings: Simply put-all earnings by persons subject to tax as laid out by law and regulations

Withholding Allowance:  is an amount of an individual’s earnings that is exempt from income tax (non-taxable)

Exemption:  is an amount of an employee’s annual earnings not subject to income tax

FICA taxes:  Both employer and employee both have to pay these taxes, which are commonly known as Social Security Tax and Medicare taxes. The employer withholds FICA Taxes from employee’s wages and pays them to the U.S. Treasury.*

*source material College Accounting, Douglas J. McQuaig /Patricia Bille, 8th Edition

Understanding tax terminology is one thing but doing your taxes correctly is another thing.  Find a reliable tax expert or tax preparer to work on your taxes.  They understand taxes inside out and will assist you with your tax strategy.  You can find tax experts in San Francisco or New York or in Winnemucca, Nevada.  There is no excuse not to get one.

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