Virtual Business: Personal Finance Lesson 12 Review

A paycheck has withholding tax taken out:

• If a person earns more than $600 a year

• That is paid to state and federal taxing authorities

• That is automatically refunded to workers even without filing a 1040EZ form

• That is always equal to $9.54

To file your taxes, you need:

• Every pay stub from the entire year

• Every deposit slip from your saving account

• W2 and 1099INT reports, and charitable deduction receipts

• A computer

A major payroll tax is called:

• FICA, for Federal Insurance Contributions Act

• SSN for Social Security Number

• Capital gains tax

• Business tax

The federal government

• Is the national government of the U.S. that takes in taxes and funds such programs as maintaining interstate highways and the military

• Does not supply Social Security cards

• Is not allowed to tax income

• Is the national government of the U.N. that are responsible for taxes and funds such programs as maintaining interstate highways and humanitarian needs

Taxes go to pay for:

• Social Security 10%, National Defense 10%, and Medicare 12%

• Social Security 50%, National Defense 50%, and Medicare 12%

• Social Security 21%, National Defense 21%, and net interest 9%

• Social Security 12%, Nation Defense 12%, and net interest 12%

The W2 form:

• Reports interest from your bank to the IRS

• Is provided to you by your employer, and it lists total income and all tax withheld amounts

• Is provided by the IRS, and lists your tax paid for the year

• Keeps track of charitable donations made by cash or check outside of work.

A program like Quicken or Money:

• Can help keep track of receipts over a year to make taxes easier to complete

• Is required to complete taxes

• Is necessary in order to get the refund owed to the taxpayer

• Can only be used when filing electronically

The penalty for not paying taxes owed:

• Can't be calculated if you do not file taxes

• Includes penalty fees and interest calculated starting April 15 of the year the taxes are owed

• Can be determined by the Social Security Administration even if withholding is not taken from your paycheck

• Will be $600 plus interest starting April 15 if you do not file a tax return, regardless of the amount of your wages

Which of the following forms reports interest income earned on a savings account

• 1040EZ

• 1099MISC

• 1099INT

• W2

Tax refunds:

• Occur when a taxpayer's income tax payments, including withholding, exceed what they owe

• Are distributed to all taxpayers if the government tax receipts exceed its spending

• Come to taxpayers regardless of whether they file an income tax return or not

• Are greater if you file your taxes in January, rather than April