Tax Forms and Intro to Income Statement
W-4
A form completed by an employee to indicate his or her tax situation (exemptions, status, etc.) to the employer. The W-4 form tells the employer the correct amount of tax to withhold from an employee's paycheck.
Dependent
A person who relies on another taxpayer for at least 1/2 of their support
Net Pay
Earnings after taxes
Gross Pay
Earnings before Taxes
Examples of Expenses
Employee salaries, advertising, rent, utilities, depreciation of buildings, automobiles, and office equipment
W-2
Form that an employer must send to an employee and the IRS at the end of the year. The W-2 form reports an employee's annual wages and the amount of taxes withheld from his or her paycheck.
1099
Form that details all "non-employee" compensation. This includes income for completing specific jobs, like freelancers or contractors who are effectively self-employed.
I-9
Form used by an employer to verify an employee's identity and to establish that the worker is eligible to accept employment in the United States.
Social Security
Payment towards retirement
Income Statement Equation
Revenues - Expenses = Net Income
Examples of Revenue
Sales Revenue, Fee Revenue, Interest Revenue, Rent Revenue
1040
Standard Internal Revenue Service (IRS) form that individuals use to file their annual income tax returns.
Excise Tax
Tax on gas, alcohol, etc.
April 15
Taxes are Due
Pay stub
When employees receive their paychecks from you, the pay stub is what outlines the details of their pay for each pay period.