Paying Your Taxes Summative

Which statement is TRUE about Payroll Taxes?

• Payroll taxes fund the Social Security and Medicare programs.

• Payroll taxes are paid are paid on both earned and unearned income

• The amount of tax paid depends on many different factors but increases as income increases.

As Mariah was looking over her sales receipt for the shirt she bought at a retail store, she discovered that she was charged 6% more than the price tag showed for the item. What is this extra 6% charge most likely to be?

• Sales tax on the shirt she purchased.

• Property tax on the shirt she purchased.

• Income tax on the shirt she purchased.

Who is Medicare designed to help?

• Senior Citizens

• Low income families

• Single parents

Dane is researching the topic of property taxes for a presentation he is doing in his Personal Finance class.He has come across the following statements he is considering adding to his presentation. Which should he EXCLUDE from his presentation because it is not correct?

• Property tax on homes, land and buildings are usually only paid once or twice each year.

• Property taxes are usually charged by state and local governments to pay for local schools and other services and expenses incurred by these governments.

• Property taxes are assessed at the same rate for all types of property, including homes, land and building, regardless of location or whether they are used for business or personal use.

Which statement is NOT TRUE about property taxes?

• Property taxes are most often paid only once or twice each year.

• The fee paid to license a vehicle is an example of property tax.

• The property tax rate is set by the federal government to be equal in every state.

Taxes that are charged on consumption items such as gasoline, hotel rooms, and airline tickets are called_____________ taxes.

• Excise

• property

• Federal use

Austin has just received his first paycheck. He worked 22 hours at his new job and is being paid $8.00 per hour. He calculated that his paycheck should be $176. His paycheck amount is almost 1/3 less than he expected. What is the most likely reason that Austin’s pay is less than he expected it to be?

• Austin neglected to deduct the amount required to pay income and payroll taxes

• Austin neglected to deduct the excise tax paid on the uniforms he purchased to wear at his job.

• Austin’s employer made a mistake calculating the number of hours Austin worked during his first pay period.

What made the income tax a permanent part of the U.S. tax system?

• Passage of the 16th Amendment to the Constitution in 1913

• None of the above

• A vote by Congress in 1955

By accurately completing this form when you begin a new job, it can prevent you from overpaying taxes(allowing you to keep more money in each paycheck), and it can ensure you don’t have a big balance due at tax time

• W-2

• Form 1040

• Form W-4

The IRS recommends that you complete a new Form W-4 every time a major life event occurs, such as

• birth of a child

• a spouse gaining or losing a job

• all above