Consumer Ed Module 2 Test

At what amount do you have to start paying taxes?

$6350.00

Which one is faster, 1040EZ or 1040?

1040EZ

What is the 1040 form for?

A long form Used to file tax returns, which is why people use 1040EZ

What are pros and cons of tax-preparation software?

Access to proffesional tax help, but you are not in charge

Identify one advantage of using tax filing software to file your taxes.

Access to tax professionals Quicker returns Designed to help you to get as many deductions as possible You are able to e-file

What day is the last day you pay for taxes if you got an extension?

April 18th

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

Call on the phone or go online

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

False

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

False. You can be whatever age you want.

True or False. You need a W-2 form only for filing your federal taxes, not your state taxes.

False. You need it for both federal and state taxes

The more allowances that I claim on my W-4, the __________ (fewer/more) taxes will be withheld from my paycheck.

Fewer

What is the difference between net pay and gross pay?

Gross pay is the amount you made before taxes are made. Net pay is how much you earned after all of the taxes get added.

What does the W-2 form tell you?

How much money you made last year, and how much was deducted

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

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

If you a file a tax return, you could be entitled to certain tax credits. You may also receive a tax return.

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

If you claim 0 or 1, that means more money will be kept from your paycheck. You will most likely recieve a tax refund when you file taxes.

When do you have to pay all of your taxes?

In April

What are pros and cons of professional tax preparations?

Its for married people, someone else id doing them for ou

What day can you start filing tax returns and the e-file goes live?

January 29th

What is the deadline for employees to recieve the W-2 form?

January 31st

What are some deductions that you will see on your paycheck?

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

What taxes will you not recieve a refund for, even if you file a tax return?

Medicare and Social Security

List an example of mandatory spending?

Money for medicare and unemployement

Can you use 1040EZ if you have dependents or investment income?

No you can't

Do teens really owe taxes?

Not necessarily since they don't make enough to.

What is the 1099 form for?

People recieve this when they aren't employees, but the company pays them

List an example of discretionary spending?

Spending for military and education systems

Why do we pay taxes?

The government wouldn't be able to pay for oublic services without the tax money.

What are advantages of filing a tax return?

The money gets returned straight to your bank account.

What is the purpose of the W-4 form?

To list your dependents to your employer, so they know how much to deduct from your paycheck.

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

True

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

True

When do you recieve the W-4 form?

When you start a job

What should you do if you can't pay for bills in time?

You can call in for extension

What are pros and cons of old-fashioned tax filing?

Your in charge of your taxes, but you can make mistakes

How much you pay in taxes depends on....

your income, or how much you make.