Paychecks and Taxes

Gross income is also called “take-home pay.”

• True

• False

Net income is gross income minus ____.

• payroll deductions

• bonuses

• interest earnings

• tax credits

Social Security is a program paid for by voluntary contributions from employees and employers.

• True

• False

The Form W-2 determines ____.

• if you should itemize your deductions

• the amount of insurance premiums employers should withhold from your paycheck

• how much tax was withheld from your paycheck last year

• whether or not you are eligible for tax credits

The Form W-4 determines ____

• how much tax was withheld from your paycheck last year

• your eligibility for tax credits

• the amount of payroll deductions employers should withhold from your paycheck

• If you are entitled to a tax refund

The Social Security taxes deducted from your earnings today pay for ____

• the health care needs of the poor

• the benefits you will receive at retirement

• the benefits others are currently receiving

• roads and schools

Under the Social Security system, your financial need determines the amount you will eventually receive in retirement benefits or in disability benefits if you should become disabled.

• True

• False

When you retire, Social Security payments start automatically.

• True

• False

A dependent is someone who...

• relies on someone else to provide a quarter or less of their financial support

• relies on someone else to provide more than half of their financial support

• is able to fully financially support themselves

• provides financial support for someone else

Jeremy just started a new job and completed his W-4 form. Who should he submit it to?

• employer

• spouse

• IRS

• no one- he keeps it for his records