Paycheck Basics/ Taxes
Which item is NOT a mandatory deduction from a person's salary?
401k contribution
Your contribution (%) towards social security is?
6.2%
The organization that collects Federal taxes and enforces tax rules is called what?
Internal Revenue Service (IRS)
What is the federal income tax rate that is withheld from a paycheck?
It depends on the information in your W-4 and your salary
In addition to monthly mortgage payments, each year a homeowner can expect to pay?
Property Taxes
What type of tax deals with land, and buildings?
Property Taxes
When a person wins $5,000 in the lottery, the person will
Report the $5,000 to the Internal Revenue Service (IRS) as income for that year
What are two tax deductions represented within FICA?
Social Security and Medicare
By paying income & payroll taxes with every paycheck you earn, this helps manage your personal______________ on an ongoing basis
Tax Liability
Required charges of citizens by local state and federal governments
Taxes
A person has a car loan with a 10% interest rate. The loan would cost the least amount of money if it is paid back in
The least amount of time
What does the Form W-4 determine?
The percentage of an employee's pay that will be withheld for federal taxes
Is interest on a savings account taxable?
YESSS! Interest is considered income!
Totals payroll withholdings from the paycheck from Jan 1st to the last day of the pay period?
Year to Date
One advantage to have your paycheck direct-deposited into your bank account?
Your funds are available faster than depositing a check in your account
You should have an emergency savings of at LEAST:
3-6 Months
What does Payroll Tax fund?
(FICA) Social Security & Medicare Programs
Your contribution (%) towards Medicare is?
1.45%
What information is provided on the Form W-2?
Amount of money earned and taxes paid throughout the previous year
On what day is it required you complete your taxes or file an extension?
April 15th
Employers directly deposit an employee's paycheck into his/her bank account and send the employee the pay stub
Direct Deposit
What documentation could be provided to complete a Form I-9?
Drivers license, Social Security Card, Military ID, Birth Certificate, Passport
Taxes charged on items such as gasoline, tobacco, alcohol, hotel rooms, and airline tickets
Excise Tax
TRUE or FALSE: A form W-4 is a wage and tax statement and states the amount of money earned and taxes paid throughout the PREVIOUS year.
False
True or False: A PRO of selecting to receive a paper paycheck is that your net income is automatically loaded on a card.
False
True to False: Gross Income is the amount that is often referred to as the take home pay.
False
FICA stands for?
Federal Insurance Contribution Act
What two forms must an employee complete when beginning a new job?
Form W-4 and Form I-9
calculated by multiplying the number of hours worked by the hourly wage
Gross Income
When a person increases his number of payroll exemptions, he will have an increase or decrease in his net income?
Increase
Health care program for the elderly and disabled.
Medicare
The U.S. government uses a progressive/graduated income tax method. What does this mean?
More you earn, the more you pay
What does Social Security fund?
Nation's retirement program
amount of money left after all deductions have been taken from the gross income earned in the pay period
Net Income
The length of time for which an employee's wages are calculated
Pay Period
A document an employee receives that outlines wages earned and deductions made to wages.
Paycheck Stub
Services our tax dollars are used for
Police, schools, roads, emergency services, government agencies, etc
TRUE or FALSE: FICA includes Social Security and Medicare
True
True or False: A dependent is someone you are able to claim on your form W-4 because you financially support that person.
True
True or False: Completing a form I-9 proves citizenship.
True
True or False: Income taxes must be filed or apply for an extension by April 15th.
True
True or False: Taxes are required charges of citizens by local, state, and federal governments.
True
True or False: The MORE allowances you claim on your form W-4, the LESS money is deducted from your gross income.
True
True or False: Three examples of payroll withholdings are Federal, State, and FICA
True
Interest earned on US Series EE Savings Bonds is exempt from state an local taxes
True, this is only taxed at the federal level
How much is sales tax?
Varies from state to state VA- 5.3% DE- NONE!
What form does your employer send you every year in the month of January as a statement of the previous year?
W-2
One of the reasons cigaretts, alcohol & gasoline are so expensive is why?
the government inposes an excise tax on them.