Personal Finance W-4 Quiz
When should you check on your employer's check withholdings?
(It could be as many times as you'd like) Mid-year, around June
Where would you submit a W-4?
(Payroll department) Human Resources
How does your employer know how much to deduct from your check?
(You tell them) Through the W-4
What factor do only some employers need to deduct for? Why?
401-K; not all employers support a 401-K plan
What percentage must you pay as a minimum throughout the year to not be penalized (or penalized as heavily)?
90%
When are federal taxes paid?
April 15 (tax day - maximum)
What is another official term for the W-4?
Employee withholding allowance certificate
What three factors does your employer always need to deduct for?
FICA, Fed tax, State tax
How can you fix the common problem of your employer's withholdings not matching up to needed payments?
Fill out another W-4
What does the W-4 establish?
How many allowances you are allowed to take
What is the purpose of the W-4?
How much will be withheld from your paycheck
What does the W-2 summarize?
How much you earned and how much was taken out (FICA, State, Fed)
What does the HR department use to figure out how much to pay with taxes
IRS guidelines (tables) (also called Circular E)
Why does it matter how close your deductions are from your actual situation?
If you are too low, you will have to pay the balance (and a penalty if the balance is >= 10% of what is needed). If it is too high, you get a return, but that's just a loan to the US Government with no interest!
Where are all your federal taxes sent to?
Internal Revenue Service (IRS)
To owe or not to owe...
It is ideal to owe, but less than 10% (no penalty)
Why is the W-4 important?
It is your opportunity to make sure that your employer does not take too much money away from your paycheck
Employers are mandated to issue all employees a statement of earnings and deductions by ________ __ of every year
January 31
What is Mrs. Post's suggestion on allowances?
No more than 2
Is the employer responsible for any problems with pay?
No, since you signed the W-4. Unless the company makes a mistake in pay (which they typically don't)
How many times are federal taxes paid per year?
Once
When will your employer first ask you to fill out a W-4?
Right when you are hired and meet with HR
Where are all FICA payments sent to?
Social Security (SS)
Where are all your state taxes sent to?
The State (for us, GA)
How does the HR department use your W-4 and IRS tables?
They see your salary, certain number of allowances, and look up how much to deduct in the table
How many times are you allowed to file a W-4?
Unlimited
What is the purpose of the W-9?
Verification of employment and eligibility of employment
Your "statement of earnings and deductions" is also called a what?
W-2 Form
Are you allowed to change your W-4 in the middle of the year?
Yes, multiple times if necessary
What are the three scenarios once it comes tax season?
You paid exactly what you should have, you owe taxes, you get a refund on some payments
What is the problem with a refund from taxes?
You paid more than you should have, meaning you gave the US Government a loan with no interest, AND you probably lost value as inflation would've made the dollar you sent worth more than the dollar you got back
Paying less than 90% of required taxes throughout the year will result in __________ ________
additional interest
The more allowances you claim, the _____ the ___ _________ is.
lower; tax deduction
You use your W-2 to reconcile what was ____ with what is ____!
paid; owed
If you underpay your taxes during the year, you will be _________.
penalized
It is a good idea to attach your W-2 to your ___ _____
tax forms