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Installment Agreements
To be eligible for an installment agreement, all returns that are due must first be filed. Installment agreements generally require equal monthly payments. The amount of an installment payment will be based on the amount owed and on the taxpayer’s ability to pay that amount within the time legally available for the IRS to collect.
Compulsory payroll tax
An automatic tax collected from employers and employees to finance specific programs.
Income taxes
Taxes on income, both earned (salaries, wages, tips, commissions) and unearned (interest, dividends). Income taxes can be levied on both individuals (personal income taxes) and businesses (business and corporate income taxes).
Federal income tax
The federal government levies a tax on personal income. The federal income tax provides for national programs such as defense, foreign affairs, law enforcement, and interest on the national debt.
Employee
Works for an employer. Employers can control when, where, and how the employee performs the work.
Work Opportunity Credit and Welfare-to-Work Credit
The work opportunity credit and the welfare-to-work credit are scheduled to expire for wages paid to individuals who began working for you after 2003.
Family daycare providers
A family daycare provider is a person engaged in the business of providing family daycare.
Form W-4, Employee's Withholding Allowance Certificate
Completed by the employee and used by the employer to determine the amount of income tax to withhold.
Gross income
Money, goods, services, and property a person receives that must be reported on a tax return. Includes unemployment compensation and certain scholarships. It does not include welfare benefits and nontaxable Social Security benefits.
Exemptions
Amount that taxpayers can claim for themselves, their spouses, and eligible dependents. There are two types of exemptions-personal and dependency. Each exemption reduces the income subject to tax. The exemption amount is a set amount that changes from year to year.
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