Test ReviewTaxes, Insurance, Benefits,

Fixed Expense

Expenses that stay the same each month are

W-2

The federal form that is mailed to you by your employer summarizing taxes paid during the year is

W-4 The federal form that you fill out for

your employer when you first become employed to help them figure out how much tax should be deducted from your paycheck is

Life Insurance The type of insurance needed to

compensate individuals left behind when you die

Medicare The health benefit provided to the

eldery to reduce the cost of medical expenses

Variable/Flexible Expenses Expenses that fluctuate (change each

month) are

Liability Insurance that covers others hurt by

your negligence

Payroll Tax A tax on earned income that supports

the Social Security and Medicare programs (also known as FICA)

Disability Insurance• Replaces part of your income lost due to

illness or injury

Beneficiary The individual who receives the

proceeds from a life insurance policy

Health Insurance Insurance that covers the cost of

medical procedures

I-9 The form you must complete before

working proving you are eligible to work in the United States

1040EZ The document you complete for filing

taxes

Premium The monthly amount paid for insurance

Deductible The amount that you have to pay on a

loss before the insurance begins paying

Net Pay Gross pay minus deductions equals

Direct Compensation This is compensation usually paid in

monetary form such as salary, wages, merit pay, bonuses, and stock options.

Co-insurance requires the insured individual to pay a

fixed percentage of the loss after the deductible has been paid

Emergency Savings When you have 6 months of expenses

set aside in case of unexpected events

Social Security A payroll tax deducted at a rate of 6.2%

Policy Holder Person who owns the insurance policy

Long Term Care Payment for extended nursing care

when a person cannot live independently (but doesn’t need to be hospitalized

Automobile Insurance Insurance that covers the cost of fixing

your car if you back in to a pole is

Budget The process of planning for monthly

expenses and income

Pre-Tax Deductions Deductions are made from your

paycheck prior to other taxes being deducted

Indirect Compensation Benefits of working at a job in the form

other than monetary payment (vacation, sick days, company car, etc.)

Salary The amount of money you are paid

regardless of the number of hours or days you work

Property Insurance payment to insured person if his/her

property is damaged or destroyed by an accident

Policy A contract between the insurance

company and the insured that states the exact terms of the coverage

Wage The amount an employee is paid per

hour for time worked.

Post Tax Deduction Additional deductions are taken from

your paycheck after taxes have been paid

April 15 The deadline for filing your taxes

Age 26 Your parents are able to carry you on

their health insurance until this age.

Risk An uncontrollable or unforeseeable

event that can occur

Claim A formal request to an insurance

company asking for payment when the policyholder has an accident, illness or injury

Other things to Review: Be able to identify or categorize examples

as fixed or variable examples Calculate a budget (like we did in class) Examples of pre & post tax deductions Reasons to have a budget PYF-Pay Yourself First When you can use a 1040EZ form You will need to be able to work a 1040EZ

scenario