Unit 8 Review

Mandatory government spending includes which of the following?

• Infrastructure and science

• Social Security and Medicare

• Healthcare and military

• Education and agriculture

What does the term "withholding" mean in reference to your paycheck?

• The amount of your paycheck that you are NOT being taxed on

• How much you are going to owe the government when you file your annual tax return

• How much you earn and includes salary, bonus and commissions

• How much is being taken out of your paycheck for things like taxes, employer sponsored health insurance, and retirement

When do you start paying income taxes?

• When you turn 18

• When you get a full-time job (part-time does not count)

• When you make more than the minimum income requirement

• When you are notified by the IRS that you are required to pay federal income taxes

Why is it important to be extremely careful when completing your 1040 form?

• Making a mistake will disqualify you from receiving future refunds

• The 1040 form determines whether you owe additional taxes or are entitled to receive a refund from the government

• Completing the 1040 incorrectly will mean the wrong amount of taxes will be withheld from your paychecks going forward

• Mistakes on your 1040 form make you ineligible for employment during the next year

If your only income is salary paid by your employer, which of these statements about filing your taxes is true?

• You need to file your tax return by the end of the calendar year (typically December 31st)

• If your employer takes out federal income taxes through payroll withholdings, you do not need to file a tax return

• You must file your tax return by the deadline (typically April 15th of the following year) or request an extension by that date

• You do not need to pay any income taxes until April 15th, so you should ask your company to wait until after that date to withhold any money

You are starting your first job and you are asked to complete some paperwork on your first day. Which form will determine how much money is withheld from your paycheck for taxes?

• W-2

• W-4

• I-9

• 1040

Which of the following paycheck withholdings puts money into a retirement investment fund that you will manage?

• Social Security

• Medicare

• 401(k) contribution

• Federal income taxes

All of the following people would be required to file a tax return EXCEPT…

• Janet, who earned $28,200 but was paid entirely in cash

• Max, whose total income from three separate part-time jobs was $9,500

• Isaiah, who owns his own business and generated an income of $7,000

• Dani, who is a cafe barista and earned $13,000 in wages and $250 in tips

Which of the following statements about the W-2 form is TRUE?

• A W-2 lists all the money you earned in cash over the last year

• The total wages you earned from ALL jobs you worked in the previous year appear on ONE W-2 form

• You need a separate W-2 form from EACH of your employers in order to file your taxes

• The W-2 includes information about the interest you earned from your investments

If a taxpayer fills out their W-4 in a way that does not withhold enough money to cover their tax obligation, what is the most likely outcome after they file their taxes?

• They will receive a refund

• They will owe a payment to the IRS

• They will be audited

• They will be charged with tax evasion