Personal Finance MCC Module 1

What are two examples of Employer Contributions?

401k & Roth IRA

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.

Why does the government need taxes?

For expenses and for your benefits like for social security and healthcare.

When should you receive your W-2 form from your employer?

January 31st

What is one example of "mandatory" spending? What is one example of "discretionary" spending?

Mandatory spending is social security and medicare. Discretionary spending is education and military.

If you can't pay immediately, what is one course of action you can take? What are the criteria?

Monthly installments

What is one benefit that you or someone you know receives as a result of government spending?

Clean Water and clean air

What are Pre-Tax Deductions and Contributions?

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

In which box on your W-2 can you find your... 1. Wages and incomes 2. Taxes Withheld

1. 1 2. 2

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

Earned income from previous job

What is one other way you can pay?

Electronic Federal Tax Payment System

In your own words, explain the difference between gross income and net income.

Gross income is the total amount of money you make before deductions. Net income is the amount of money you take home after deductions (social security, insurance, and taxes) are automatically taken out of your pay check.

What are the two primary ways you can make a tax payment?

Pay with your bank account, or credit or debit.

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

All of the following people should receive W-2 Forms EXCEPT...

Serena, who is a freelance wedding photographer

Which of the following statements about the W-4 form is TRUE? (Select all that apply)

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.