Tax Forms and Intro to Income Statement

W-4

A form completed by an employee to indicate his or her tax situation (exemptions, status, etc.) to the employer. The W-4 form tells the employer the correct amount of tax to withhold from an employee's paycheck.

Dependent

A person who relies on another taxpayer for at least 1/2 of their support

Net Pay

Earnings after taxes

Gross Pay

Earnings before Taxes

Examples of Expenses

Employee salaries, advertising, rent, utilities, depreciation of buildings, automobiles, and office equipment

W-2

Form that an employer must send to an employee and the IRS at the end of the year. The W-2 form reports an employee's annual wages and the amount of taxes withheld from his or her paycheck.

1099

Form that details all "non-employee" compensation. This includes income for completing specific jobs, like freelancers or contractors who are effectively self-employed.

I-9

Form used by an employer to verify an employee's identity and to establish that the worker is eligible to accept employment in the United States.

Social Security

Payment towards retirement

Income Statement Equation

Revenues - Expenses = Net Income

Examples of Revenue

Sales Revenue, Fee Revenue, Interest Revenue, Rent Revenue

1040

Standard Internal Revenue Service (IRS) form that individuals use to file their annual income tax returns.

Excise Tax

Tax on gas, alcohol, etc.

April 15

Taxes are Due

Pay stub

When employees receive their paychecks from you, the pay stub is what outlines the details of their pay for each pay period.