Financial literacy- Taxes quiz review

Traditionally when do you have to file your taxes?

April 15th

What is the deadline to file your tax return, and what can you do if you know you will miss that deadline?

April 15th, file an extension

Give two reasons why someone would go to a tax professional (rather than using tax filing software or using the paper forms) to file their tax return.

-no time -major life change -status changes

How many w-2 forms can you receive in 1 year?

1 for every job worked

What is the definition of a "dependent" for tax purposes?

A child or an adult that lives at home and you support financially

What is an I-9 form?

A document to prove that you are eligible to work in the US

Why is it important to be extremely careful when completing your 1040 form?

Determines if you own or receive

Jake 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. What would Jake need to do come tax time?

File taxes in both states

Jane just accepted a new job and is working with the company's HR department to fill out paperwork. What is she required to do for tax purposes?

Fill out the W-4 form

Briefly explain the difference between discretionary and mandatory government spending.

Mandatory: everyone gets taxed the same amount Discretionary: amount differs

Jill is 16 years old and worked at her local grocery store over the summer earning $5,600. Is Jill legally required to file a tax return? If not, should she file anyway? Explain.

No she is not, but she should to get the money she paid in taxes back

Jessica is 16 years old and earned $1,100 through her photography side gig. Her parents can claim her as a dependent on their tax return. Should she expect to get a W-2 in January?

No, she has no employer, no taxes are being taken out

Bob 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 $3500. Based on how he completed his W-4, his employer withheld $287 in federal income taxes from his paychecks. What will happen if Bob doesn't file taxes in April?

Nothing, he is legally required to because he is claimed as a dependent. He can if he wants to get his money back.

What are the advantages and disadvantages of tax filing websites?

Pros: fast and efficient, cheaper than a professional cons: fees, can still make a mistake

List two things the federal government spends your tax dollars on that you benefit from.

Public library Clean environment

What are examples of mandatory government spending programs that are deducted from your paycheck?

Social security and medicare

What does the term "withholding" mean in reference to your paycheck?

The amount taken out of your paycheck for taxes, insurance, and retirement

What is a w-4?

The form you fill out at your first day at work, for your employer to determine how much of your taxes should be taken out of your paycheck

If a taxpayer fills out their W-4 in a way that does not withhold enough money to cover their tax obligation, what is the most likely outcome after they file their taxes?

They owe money to the IRS

What is a 401k contribution under your list of paycheck withholdings?

Under retirement

When do you start paying income taxes?

When you make over $12,950

Your friend Alice is a full-time college student, earned $4,000 working at the campus bookstore over two semesters last calendar year, and also got a part-time job as a cashier in February, earning $9,500. Alice knows that you have been learning about taxes in your personal finance lessons and asks you, "Do I need to file taxes this year? If I do, what is the process like?" a. Determine if Alice needs to file taxes this year and explain your reasoning. b. If you conclude that Alice does need to pay taxes, explain what forms she will need, what the deadlines are, and what method you recommend she use to file her taxes.

Yes, she makes over 12,950 1040, 2 W-2 forms by April 15 or request an extension You must get your w2 from your boss by January 31 Tax sooner, because it will help through each step, gives access to professionals, cheaper than paying for a professional

What is the definition of a tax refund?

Your overpaid taxes throughout the year. The government owes you money