Tax Review

Elaine is an employee. Which of the following steps is she responsible for? A. Determine how much tax to withhold based on W-4 information B. Complete a W-4 C. Send withholding amounts to the federal government D. Request a W-2 annually

B

Upon completing your 1040, you realize that you owe the IRS $427. Each of the following is a possible way to pay the taxes you owe EXCEPT... A. Write a check and mail it to the IRS. B. Tell the IRS to take out more taxes next year to pay back the $427. C. Use your debit or credit card online or by phone. D. Set up a direct payment from your bank account.

B

What does the term "withholding" mean in reference to your paycheck? A. It is the amount of your paycheck that you are NOT being taxed on. B. It is how much is being taken out of your paycheck in taxes. C. It is how much you are going to owe the government when you file your annual tax return. D. It is how much you earn and includes salary, bonus and commissions.

B

When do you start paying taxes? A. When you turn 18 B. When you make more than the minimum income requirement C. When you get a full-time job (part-time does not count) D. When you are notified by the IRS that you are required to pay federal income taxes

B

Which of the following are the three largest categories of federal government spending? A. Infrastructure, Defense, and Science B. Health, Military, and Interest on Debt C. Veterans, Infrastructure, and Education D. Education, Defense, and Food/Agriculture

B

Which of the following statements about this W-2 is true? A. Avia Consulting will use this W-2 to file their 1040 form B. Lily paid state income taxes of $1,189.90 C. Lily earned about $117,000 over the year based on the total of her Wages, Social Security wages, and Medicare wages D. Lily works in the same city that Avia Consulting is based in

B

Why is it important to be extremely careful when completing your 1040 form? A. Making even one mistake on your federal taxes can result in your being convicted of a crime B. The 1040 form determines whether you owe additional taxes or are entitled to receive a refund from the government C. Completing the 1040 incorrectly will mean the wrong amount of taxes will be withheld from your paychecks going forward D. Mistakes on your 1040 form make you ineligible for employment during the next year

B

You are starting your first job and you are asked to complete some paperwork on your first day. Which form will determine how much money is withheld from your paycheck for federal and state income taxes? A. W-2 B. W-4 C. I-9 D. 1040

B

You will need to pay a 15.3% self-employment tax if you earn $1,100 in a year... A. Babysitting your cousin's kids B. Screen printing and selling custom made t-shirts C. Working at the local ice cream store D. Interning at a local design company

B

Your friend Laila is talking to you about the benefits of tax filing software. Which of the following is true? A. Filing your taxes using the software is always free of charge. B. You can avoid the costs of having to pay a professional, though you may have to pay for the software and/or e-filing online. C. You are guaranteed a higher refund than if you were to use a paper form or hire a professional. D. You are 50% less likely to make a mistake when e-filing your taxes than if you were to file them using paper forms.

B

Akshay worked at a cafe while he was a college senior in Boston, Massachusetts. After graduating in June, he moved back to his home in California and started a full-time job in September. Which of the following statements is true? A. Akshay will need to file only a federal tax return. B. Akshay will need to file a federal tax return and a state tax return for Massachusetts. C. Akshay will need to file a federal tax return and a state tax return for both Massachusetts and California. D. Akshay will need to file a federal tax return this year and file state returns the following year.

C

When determining whether you NEED to file a federal tax return, each of these questions matters EXCEPT... A. How much income did you earn this year? B. What type of income did you earn this year? C. What state do you live in? D. Are you claimed as a dependent on anyone else's tax return?

C

Which of the following paycheck withholdings puts money into a retirement investment fund that you will manage? A. Social Security B. Medicare C. 401(k) contribution D. Federal income taxes

C

Which of the following statements about the W-2 form is TRUE? A. A W-2 lists all the money you earned in cash over the last year B. The total wages you earned from ALL jobs you worked in the previous year appear on ONE W-2 form C. You need a separate W-2 form from EACH of your employers in order to file your taxes D. The W-2 includes information about the interest you earned from your investments

C

Which of the statements below is TRUE about filing your taxes, assuming your only income comes from the salary you earn at BigTech Company? A. You need to file your tax return by the end of the calendar year (typically December 31st) B. If your employer takes out federal income taxes through payroll withholdings, you do not need to file a tax return C. You must file your tax return by April 15th of the following year or request an extension by that date D. You do not need to pay any income taxes until April 15th, so you should ask your company to wait until after that date to withhold any money

C

Marquis is starting a fast food job during his senior year of high school. He lives with his parents and they will claim him as a dependent on their taxes this year. He earns $2000. Based on how he completed his W-4, his employer withheld $200 in federal income taxes from his paychecks. What will happen if Marquis doesn't file taxes in April? A. The IRS will refund his $200 directly to him. B. The IRS will refund his $200 to his parents. C. The IRS will fine Marquis $75 or more for not filing taxes. D. Nothing will happen, but Marquis will miss out on his potential refund.

D

Question #3 of 3: How frequently is this employee paid? A. Daily B. Weekly C. Every other week D. Monthly

D

When you complete your 1040 form, if you overpaid your taxes and the government owes you money, that is called a __________. A. withholding B. direct deposit C. deduction D. refund

D

Question #2 of 3: How much did this person pay towards Medicare in this pay period only? A. $19.62 B. $40.82 C. $117.72 D. $244.92

A

What form am I? I am accepted when you start a job. You use me to prove that you are eligible to work in the U.S., and you must provide forms of identification when submitting me. A. I-9 B. 1099 C. 1040 D. W-4

A

Which of the following describe what a "dependent" is for tax purposes? A. Someone under the age of 19 who you financially support B. Someone who is temporarily disabled C. Someone who financially supports you D. Someone who is a full-time student under the age of 30

A

Juanita has a part-time job that pays $12/hour and works about 50 hours every month. Her withholdings are Social Security (6.2%), Medicare (1.45%) and federal income tax (10%). What is her approximate net pay? A. $120 B. $500 C. $600 D. $700

B

Out of the following group, who does NOT have to file a tax return? A. Janet, who earned $28,200 but was paid entirely in cash. B. Max, whose total income from three separate part-time jobs was $9,500. C. Isaiah, who owns his own business and generated an income of $7,000. D. Dani, who is a cafe barista and earned $13,000 in wages and $250 in tips.

B

Question #1 of 3: What was the net (or take-home) pay for this employee for this pay period? A. $250.35 B. $1,102.98 C. $1,353.33 D. $1,502.10

B