Financial Literacy - Income & Employment Lesson 2

Generally, the more education you receive, the higher your lifetime earnings will be.

• True

• False

There is no relationship between the level of education received and lifetime earnings.

• True

• False

What is net pay?

• The amount of pay earned for the total number of hours worked.

• The amount of money you're paid after all taxes and deductions are taken out of your paycheck.

• The amount of money you're paid before all taxes and deductions are taken out of your paycheck.

• Your gross pay plus any bonuses.

The amount of money you're paid, after all taxes and deductions are taken out of your paycheck is called ________.

• Gross pay

• Net pay

• Total pay

• Year-to-date pay

Which of the following is a possible tax or deduction that they may show up on your paycheck?

• Federal income tax

• Contributions to retirement savings

• FICA

• All of the above

Which of the following is NOT a possible tax or deduction that could show up on your paycheck?

• State income tax

• Contributions to retirement savings

• FICA

• Sales tax

What is the purpose of the W-4 form?

• To file your tax return.

• To determine how much your gross pay should be.

• To inform your employer of how much federal income tax to withhold from your paychecks.

• To avoid paying income taxes on your paychecks.

When you start a new job, you fill out a W-4 form to _________.

• determine how much your gross pay should be.

• file your tax return.

• avoid paying income taxes on your paychecks.

• to determine how much federal income tax your employer should withhold from your paychecks.

Your employer sends you a _______ form that tells you how much you've made and how much you've paid in taxes in the last year.

• 1040

• W-2

• W-4

• W-9

The W-2 form is a form that tells you _______.

• how often you will be paid.

• how much taxes you owe to the federal government.

• how much taxes to withhold from your paycheck.

• how much taxes you've paid in the last year based on how much you've earned.