Teens and Taxes

Which of the following jobs is considered a household employee?

• Babysitter

• Selling lemonade

• Designing websites

• Gardening neighbor's yard

Stella is 16 years old. She earned $3,500 this year at a local ice cream shop, and another $3,500 in cash babysitting her neighbor’s son. Should she file a tax return?

• No because she has earned less than is required by the law.

• Yes because everyone has to file a tax return.

• Yes so she can receive any taxes withheld that she might get back.

• No because she is under 18.

If Jose earns $1700 this year selling t-shirts he screenprints in his garage, what taxes would he need to pay?

• Property tax

• Income tax

• Self employment taxes

• None because he is at home

What tax form needs to be completed when you get hired?

• W-2

• W-4

• 1040

• 929

What is the benefit of claiming 0 or 1 withholding allowances on the W-4 form you receive when you start your job?

• It will help you with your social security.

• If you earn more than the exemption, it will keep you from owing as much tax.

• It is required by law.

• There is no benefit.

What two taxes will you NOT receive a refund for, even if you file a tax return?

• Social security tax

• FICA

• State tax

• Medicare tax

The benefit of putting your money into a Roth IRA instead of spending it is that you are saving for your future.

• True

• False

You can put all of your earned income into a Roth IRA until it meets the contribution limit.

• True

• False

You have to be at least 18 years old to open a Roth IRA.

• True

• False

You do not need to pay taxes if you earn income in cash.

• True

• False