Review of the US Tax System

Why should you accurately complete a W-4 form any time you start a new job or change your tax status?

• You need a copy of your W-4 to file your tax return annually

• Your W-4 determines how much Federal income tax money your employer should withhold

• Your W-4 determines your total tax bill at the end of the year

• Completing a W-4 will guarantee you receive a large tax refund

Jay filed his taxes and found out he owes money. What is the most reasonable explanation as to why he owes money in taxes?

• Not enough money was withheld from his paychecks.

• Too much money was withheld from his paychecks.

• When filing his taxes, Jay accidentally checked “Married filing jointly” instead of “Single”.

• The IRS is asking Jay for a future advance on his possible taxes for next year.

The Federal government spends the most amount of tax money on...

• Science

• Veterans

• Education

• Health

Which of the following people might want to claim EXEMPT on their W-4 form?

• John, who is 20 and expects to earn $13,300 from his internship.

• Stacey, who is 16 and expects to earn $7,500 from her part-time job.

• David, who is 23 and expects to earn $15,000 from his part-time job.

• Hannah, who is 25 and expects to earn $55,000 from her full-time job.

All of the following are factors that impact the amount someone may pay in taxes EXCEPT...

• Income

• Political party

• State

• Marital status

Tamara found out that she owes $3,200 in taxes. She cannot afford to pay the entire amount right now, so she is going to arrange an installment plan with the IRS. What is the one thing that Tamara should be prepared for?

• She'll have to redo her tax return so that she can note she'll be using an installment plan.

• She will pay more than $3,200 because she will be paying additional money in interest with each payment.

• Her credit score may decrease because of her inability to pay back the total she owes to the IRS.

• She will have to meet an earlier tax filing deadline next year in case she owes money again.

Which of the following is the largest source of income for the Federal government?

• Payroll tax

• Income tax

• Corporate tax

• Property tax