Personal Finance W-4 Quiz

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When should you check on your employer's check withholdings?

(It could be as many times as you'd like) Mid-year, around June

Where would you submit a W-4?

(Payroll department) Human Resources

How does your employer know how much to deduct from your check?

(You tell them) Through the W-4

What factor do only some employers need to deduct for? Why?

401-K; not all employers support a 401-K plan

What percentage must you pay as a minimum throughout the year to not be penalized (or penalized as heavily)?

90%

When are federal taxes paid?

April 15 (tax day - maximum)

What is another official term for the W-4?

Employee withholding allowance certificate

What three factors does your employer always need to deduct for?

FICA, Fed tax, State tax

How can you fix the common problem of your employer's withholdings not matching up to needed payments?

Fill out another W-4

What does the W-4 establish?

How many allowances you are allowed to take

What is the purpose of the W-4?

How much will be withheld from your paycheck

What does the W-2 summarize?

How much you earned and how much was taken out (FICA, State, Fed)

What does the HR department use to figure out how much to pay with taxes

IRS guidelines (tables) (also called Circular E)

Why does it matter how close your deductions are from your actual situation?

If you are too low, you will have to pay the balance (and a penalty if the balance is >= 10% of what is needed). If it is too high, you get a return, but that's just a loan to the US Government with no interest!

Where are all your federal taxes sent to?

Internal Revenue Service (IRS)

To owe or not to owe...

It is ideal to owe, but less than 10% (no penalty)

Why is the W-4 important?

It is your opportunity to make sure that your employer does not take too much money away from your paycheck

Employers are mandated to issue all employees a statement of earnings and deductions by ________ __ of every year

January 31

What is Mrs. Post's suggestion on allowances?

No more than 2

Is the employer responsible for any problems with pay?

No, since you signed the W-4. Unless the company makes a mistake in pay (which they typically don't)

How many times are federal taxes paid per year?

Once

When will your employer first ask you to fill out a W-4?

Right when you are hired and meet with HR

Where are all FICA payments sent to?

Social Security (SS)

Where are all your state taxes sent to?

The State (for us, GA)

How does the HR department use your W-4 and IRS tables?

They see your salary, certain number of allowances, and look up how much to deduct in the table

How many times are you allowed to file a W-4?

Unlimited

What is the purpose of the W-9?

Verification of employment and eligibility of employment

Your "statement of earnings and deductions" is also called a what?

W-2 Form

Are you allowed to change your W-4 in the middle of the year?

Yes, multiple times if necessary

What are the three scenarios once it comes tax season?

You paid exactly what you should have, you owe taxes, you get a refund on some payments

What is the problem with a refund from taxes?

You paid more than you should have, meaning you gave the US Government a loan with no interest, AND you probably lost value as inflation would've made the dollar you sent worth more than the dollar you got back

Paying less than 90% of required taxes throughout the year will result in __________ ________

additional interest

The more allowances you claim, the _____ the ___ _________ is.

lower; tax deduction

You use your W-2 to reconcile what was ____ with what is ____!

paid; owed

If you underpay your taxes during the year, you will be _________.

penalized

It is a good idea to attach your W-2 to your ___ _____

tax forms


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