Chapter 2 finance

Approximately how many filed their returns the first week of February and the week of April 15, combined?

36 million

What age groups have seen the sharpest increase as a percentage of taxpayers from 2008 to 2016?

65 year old's+ (2.6%) 55-65+

You recently saw a news article that included this graph and had the title "A Nation of Procrastinators". What evidence from the graph supports this title?

A lot of people filed their taxes on April 15 which is when taxes are due. Most people either get things done early or procrastinate until they NEED to do it.

Why is it extremely important to read the fine print of your W-4 form?

Additional forms may need to be filled out

LAST DAY TO E-FILE OR MAIL FEDERAL AND STATE INCOME TAX FORMS OR TO REQUEST AN EXTENSION.

April 15

During what months do most people pay their taxes

April and February

When Maxwell completes this W-4, who should he submit it to?

Big City Office Furniture

What are Pre- Tax Deductions and Contributions?

Contributions taken out of your paycheck BEFORE taxes are calculated on your income.

All of the following options are benefits we receive as a result of government spending except.... - Air quality - Credit card debt forgiveness - Public school education National Parks maintenance

Credit cad debt forgiveness

Last day of the calendar year. Your earnings for the year are final after this date.

December 31

You will need to include all of the following information on a W-4 form EXCEPT....

Earned income from previous job

What are 2 examples of discretionary spending?

Education, Military

What does FICA consist of?

Employer Sponsored retirement

True or False: You do not need to pay taxes if you earn income in cash.

False

Complete the following sentence: How much you in taxes depends on _______ _______.

Filing status

Which of the following people is/are legally required to file a tax return

Greg, who can be claimed as a dependent and earned $12,200 last year.

What is the difference between gross pay and net pay?

Gross pay is before taxes and deductions are subtracted; Net Pay is your take-home moeny

What are 2 examples of Employee Contributions

Health insurance and 401k

What are the top three things tax dollars are used for

Health, Military, Interest on debt

- I am received in January - There is one of me for every job you work - You can tell how much you earned and how much you paid in taxes by reading me

I am a W-2

How does your tax knowledge compare to the majority of the teens tax knowledge in the video?

I know as little about taxes as MOST of the teens that answered the question.

What's one category you wish fewer taxes were spent on? Why?

I wish fewer tax dollars were spent on interest on debt because there are more important things to spend money on such as education.

- I am received whenever you start a job - You use me to prove that you are eligible to work in the U.S. - You must provide forms of identification when submitting me

I-9

When you start a new job, you receive a form that you use to prove that you are eligible to work in the U.S. What is this form?

I-9

Research has found that it has become more difficult for teens to find part-time and summer work. Use data from this chart to support this point.

It could be harder for teens to find work because they pay the least amount of taxes that "benefit" society

What is the purpose of the W-4 form, and when do you receive it?

It determines how much taxes gets taken from your paycheck (First day of work)

In your own words, explain why we pay taxes.

It helps us pay for things that benefit our society.

As you learned in the video, there is not specific age requirement to pay taxes. Why, then , do you think there is a lack of awareness and general knowledge about taxes among teens?

It is because teens are dependent and generally dont make enough money.

If you are asked to fill out a W-9 instead of a W-4 when do you first start a job, what does that mean? What kind of taxes might you have to pay and how much are they?

It means the worker is self employed. (15.3% tax on earnings)

First day of the calendar year. Your earnings for the year begin on this date.

January 1

First day you can mail in federal and state paper form tax returns for the previous year, although you likely will not yet have your necessary W-2 or other documents to do the filing.

January 1

Deadline for employers to mail W-2s to their employees (either by paper or electronically) - If you do not receive your W-2 by ______, contract your employer. - If you worked multiple jobs in a year, you will receive multiple W-2s - The Vast Majority of people wait until after this date to file their taxes, since without a W-2 is difficult to accurately determine your tax burden

January 31

Deadline for filing federal and state income returns that have received extensions

July 15

Miguel has been working at his job for 3 years and already filled out a W-4 when he was first hired. This year, he just got married and is planning on filing his taxes jointly with his spouse. What should he do?

Request to fill out a new W-4 from his employer

If Maxwell and his spouse were to have another child, but all other aspects of their life stayed the same, which entries on a new W-4 Form would he need to change.

Step 3

What do you think causes the percent of filers to jump so dramatically between the under-18 group and the 18-26 group?

Teens are still being taken care of by their parents which means they use less government payed services, teens also don't get payed very much compared to adults which could be causing the the big gab (Teens have no experience)

What might have to happen in the US for any dramatic changes to occur in future versions of this graph.

The age of dependents increases (goes up)

Why do you think no one filed their taxes in the month of January?

They don't have all of their tax documents because businesses don't need to get our W2 forms until January 31.

What form does an employer need to send to you by the end of January so that you can file your taxes?

W-2

- I am received whenever you start a job - You list information about yourself and your family on me - I determine how much money gets taken out of each paycheck

W-4

When filing out a W-4 form, in what situation would a teen want to claim exemption from federal taxes being withheld from their paycheck? What is the benefit of doing so?

When working at a summer job they may not make enough money to file taxes which is why they would want to claim exempt.

Complete a W-4, indicating how much in taxes you'd like withheld from each paycheck - you will complete a new w-4 for every job you hold in a year - some people (independent contractors for instance) will not receive a w-4 and are responsible for manually paying taxes Complete an I-9, indicating you're eligible for employment in the United States

Whenever you start a new job

The article mentions that if you are owed a refund from the IRS, you wont be penalized if you file your tax return late. However, why might you want to file your tax return on time?

You are delaying getting your own money (if you wait to long you can lose out on getting your money back)

What is the benefit of filing a tax return even if you didn't meet the minimum income requirement?

You can earn income tax.

Distinguish between net pay and gross pay

gross pay is money made before taxes Net pay is after taxes

What is the income threshold for self- employed workers to file a tax return?

$400

To fill out his W-4, Maxwell must have needed to know the following

- His social security number - His address - The number of dependents he plans to claim on his tax returns

What information is available on a pay stub?

- Hours worked - Hourly rate - Tax deductions

What kind of jobs are exempt from paying the self- employment tax and why?

- Newspaper carriers - Distributors - Vendors - household employees

Americans pay different kinds of taxes: Income tax, sales tax, etc. What do you think are the top three categories the government spends our tax dollars on?

- Public Schooling, Roads, military

Identify two deductions you will see in your pay stub

- Social security number - State income tax

In June Maxwell's father comes to live in their home and con count as Maxwell's dependent. What steps does Maxwell need to take next?

- Submit a new W-4 - Add to Step 3 so that Maxwell claims an additional $500 for a dependent.

Which of the following statements about the W-4 form in True?

- This form is given to employees on their first day on the job - The purpose of the form is to let employers know how much money to withhold from an employee's paycheck for taxes

- I am completed every April - Anyone can use me - Beware, there is a LOT to fill out

1040

- I am received in January - You get me if you are not an employee, but were paid by a company - You probably didn't get taxes withheld if you got me, so you may have a big tax bill coming up

1099

Did you know?

15c out of our dollar goes towards paying off other peoples interest

What age group represents the highest percentage of taxpayers in 2016

25-34 year age range is the highest percentage