Personal Finance: Unit 9

- 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 can also get me for other types of income, such as gains and losses in brokerage accounts, dividend and interest payments, and more - You probably didn't get taxes withheld if you got me, so you may have a big tax bill coming up

1099

What are two examples of Employer Contributions? A. Health insurance and 401(k) B. 401(k) and Roth IRA C. Federal and state taxes D. Traditional and Roth IRA

A

Which of the following statements most accurately describes why it's important to correctly fill out a W-4 form? A. It determines how much money is withheld from your paycheck and can result in under or overpayment of taxes if filled out incorrectly B. It is a legally binding contract between you and your employer that determines how much they pay you C. If you pay the exact right amount in taxes, you receive a tax credit in the following year D. If you underpay your taxes, you'll be responsible for additional penalties beyond your normal tax obligation

A

What are two important items detailed in your W-2 form? (select two correct answers) A. Wages, tips, and other compensation B. Number of dependents you will claim C. Federal and state taxes withheld from your earnings D. Additional money you want withheld from your paycheck

A, C

***Last day to submit income tax forms or to request an extension***

April 18

All of the following options are benefits we receive as a result of government spending EXCEPT... A. Health and retirement benefits for seniors B. Credit card debt forgiveness C. National parks maintenance D. Public school education

B

If you're looking to pay as little as possible to file your taxes BUT you're worried about making mistakes, which tax preparation method would be your best option? A. Do-it-yourself paper filing B. Online tax preparation service C. Hiring a tax professional D. Requesting the IRS complete your taxes for you

B

On a pay stub, the amount of money that is left after withholdings is known as... A. Gross pay B. Net pay C. Annual earnings D. Wages and tips

B

The federal income taxes that are withheld from your paycheck are used to pay for what? A. Mandatory spending B. Discretionary spending C. Unemployment insurance D. Medicare and Social Security

B

What are Pre-Tax Deductions and Contributions? A. Contributions taken out of your paycheck AFTER taxes are calculated on your income B. Contributions taken out of your paycheck BEFORE taxes are calculated on your income

B

Which of the following people is/are legally required to file a tax return? A. Amanda, who can be claimed as a dependent and earned $850 last year B. Greg, who can be claimed as a dependent and earned $13,200 last year C. Jason, who cannot be claimed as a dependent and earned $1,500 last year D. Erin, who cannot be claimed as a dependent and earned $14,000 last year

B

You were unable to file your taxes before the April 15 deadline and your application for an extension was approved. By what date must you now file your taxes? A. May 15 B. October 15 C. December 31 D. Jan 1 of the following year

B

You will need to include all of the following information on a W-4 form EXCEPT... A. Name and address B. Earned income from previous job C. Social Security number D. Marital status

B

All of the following are found on a W-2 form EXCEPT... A. Wages, tips, and other compensation B. Federal and state taxes withheld C. Sales taxes paid D. FICA taxes withheld

C

All of the following people can be claimed as a dependent for tax purposes EXCEPT... A. A 23 year old college student whose parents pay all of their expenses B. A 17 year old high school student with a part-time job whose parents pay for all of their expenses C. A 20 year old college student with a paid internship who pays for all of their own expenses D. A 25 year old cousin with no job who has lived in your parent/guardian's house for the last year

C

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? A. Email his HR department that they need to update his W-4 B. Keep the same information on his W-4 C. Request to fill out a new W-4 from his employer D. Wait until next April to fill out a new W-4

C

What is the difference between gross pay and net pay? A. Net pay is before taxes and deductions are subtracted; Gross pay is your take-home pay B. There is no difference between gross pay and net pay C. Gross pay is before taxes and deductions are subtracted; Net pay is your take-home pay

C

What is the purpose of the self-employment tax (SECA)? A. To tax self-employed individuals a greater amount than regular employees since they're more likely to make health insurance claims B. To tax self-employed individuals a lesser amount than regular employees since they generally make less money C. To tax self-employed individuals an equivalent amount for Social Security and Medicare since FICA taxes aren't taken out of their paycheck D. To tax self-employed individuals a flat amount since they don't pay federal or state income taxes

C

When should you receive your W-2 form from your employer? A. Attached to every pay stub B. By January 1 C. By January 31 D. By April 15

C

Which statement best describes discretionary government spending? A. A fixed amount of money spent on the same categories every year B. The money used to pay for Social Security and Medicare C. A changing amount of money spent on different categories each year D. Money that you determine how it is spent by the government when you submit your taxes

C

Which of the following statements about the W-4 form is TRUE? (select all that apply) A. The purpose of the form is to provide employees with reported wage and salary information B. This form is given to employees every January C. This form is given to employees on their first day on the job D. The purpose of the form is to let employers know how much money to withhold from an employee's paycheck for taxes

C, D

All of the following people should receive W-2 forms EXCEPT... A. Edgar, who works 10 hours/week cleaning pools for $15/hour at WeCleanPools B. Melinda, who works 40 hours/week at a local ice cream shop during the summer C. Marcus, who is on salary as a sales representative at a shoe store, working full-time D. Serena, who is a freelance wedding photographer

D

Medicare and Social Security are mandatory spending categories funded by which type of taxes that are withheld from your paycheck? A. Local B. State C. Federal D. FICA

D

Which of the following are two mandatory categories of government spending that are paid for by FICA taxes? A. Military and Education B. Health and Veterans' Benefits C. Housing and Transportation D. Social Security and Medicare

D

Which of the following is the term for a tax rate that increases at higher levels of income? A. FICA tax B. Sales tax C. Flat tax D. Progressive tax

D

You are required to file a tax return in all of the following scenarios EXCEPT... A. You made $25,000 working a full-time job B. You made $3,000 from investments in the stock market C. You were self-employed and made $2,500 D. You made $9,000 working a part-time job

D

You recently accepted a new job and your first day is next week. What form will you have to complete before you receive your first paycheck? A. W-2 B. 1040 C. 1099 D. W-4

D

Your yearly earnings are final after this date.

December 31

- 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

Your earnings for the year begin on this date.

January 1

First day you can submit tax returns for the previous year, although you likely will not have received necessary documents to file, such as your W-2

January 23

Deadline for employers to mail W-2s to their employees (either by paper or electronically) If you do not receive your W-2 by ____________ , contact 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 taxes since without a W-2 it is difficult to accurately determine your taxes owed

January 31

Deadline for filing income tax returns that have received extensions

October 15

- 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

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

Who are FICA taxes for?

employer and employee

Who are SECA taxes for?

self-employed