Taxes Unit

In 2020, what percent of federal spending went toward paying interest on US debts?

10%

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

18.2 + 18.2 = 36 million

What age group represents the highest percentage of taxpayers in 2016?

25-34 at 18.0%

Benefits we receive as a result of government spending

Air quality, public school education, and national parks maintenance

Last day to e-file or mail federal and state income tax forms or to request an extension.

April 15

1040

Completed in April, anyone can use this form, there is a LOT to fill out

What are Pre-Tax Deductions and Contributions?

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

Which spending category has decreased the most since 1962? Which has increased the most?

Decreased: Military & Defense Increased: Health

What are 2 examples of discretionary spending?

Education and Military

You do not need to pay taxes if you earn income in cash.

False

You have to be at least 18 years old to open a Roth IRA.

False

During what months do most people file their taxes?

February and April

Method to file your taxes

Filling out the paper forms and mailing them, digital tax preparation software, having a professional file your taxes for you

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 pay.

What are two examples of Employer Contributions?

Health Insurance & 401k

What form indicates you're eligible for employment in the United States?

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 form

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

If you paid federal taxes during the year and file a tax return, you will likely receive a refund.

Deadline for employers to mail W-2s to their employees (either by paper or electronically) *If you worked multiple jobs in a year, you will receive multiple W-2s.*

January 31

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

Many children and teens have no source of income, and therefore have paid no taxes at all, so there's nothing to file. ALMOST everyone under 18 is a dependent and most likely isn't REQUIRED to file taxes, but somewhere in the 18-26 range they are no longer dependent and meet the income requirement to file.

Deductions you will see on your pay stub

Medicare (FICA), Social Security (FICA), Federal Income Tax, State Income Tax, Employer health plan, Employer 401(k)

What is the benefit of claiming 0 or 1 withholding allowances on the W-4 form you received when you start your job?

Minimizes the sticker shock of having a balance due.

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

October 15

W-2 Tax Form

Received in January, fill out one for every job you work, you can tell how much you earned and how much you paid in taxes

1099

Received in January; if you are not an employee, but were paid by a company; you probably didn't get taxes withheld, so you may have a bit tax bill coming up

W-4

Received whenever you start a job, list information about yourself and your family, determines how much money gets taken out of each paycheck

What does FICA consist of?

Social Security & Medicare

What two taxes will you NOT receive a refund for, even if you file a tax return?

Social Security and Medicare

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

The purpose of W-4 form is to let your employer know how much to deduct from your paycheck. You will receive the W-4 form on the first day of a new job.

The benefit of putting your money into a Roth IRA instead of spending it is that you are saving for your future.

True

You can put all of your earned income into a Roth IRA until it meets the contribution limit.

True

Complete a W-4, indicating how much in taxes you'd like withheld from each paycheck.

Whenever you start a new job