Exam Review (Taxes)

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

• It is the amount of your paycheck that you are NOT being taxed on.
• It is how much is being taken out of your paycheck in taxes.
• It is how much you are going to owe the government when you file your annual tax return.
• It is how much you earn and includes salary, bonus and commissions.

When do you start paying taxes?

• When you turn 18
• When you make more than the minimum income requirement
• When you get a full-time job (part-time does not count)
• When you are notified by the IRS that you are required to pay federal income taxes

Which of the statements below is TRUE about filing your taxes, assuming your only income comes from the salary you earn at BigTech Company?

• 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 federal and state income taxes?

• W-2
• W-4
• I-9
• 1040

Which of the statements about this W-4 is TRUE?

• Mr. Khan is filing as married filing jointly.
• Mr. Khan’s paycheck will have less money withheld from his paycheck since he is claiming a dependent.
• Mr. Khan is requesting for an additional $50 to be withheld from his paycheck.
• Mr. Khan submitted this W-4 two days after he started working at Little Company Inc.

What tax form am I? I am received when you start a job. You use me to prove that you are eligible to work in the U.S., and you must provide forms of identification when submitting me.

• I-9
• 1099
• 1040
• W-4

Which of the following statements about this W-2 is true?

• Avia Consulting will use this W-2 to file their 1040 form
• Lily paid state income taxes of $1,189.90
• Lily earned about $117,000 over the year based on the total of her Wages, Social Security wages, and Medicare wages
• Lily works in the same city that Avia Consulting is based in

What was the net (or take-home) pay for this employee for this pay period?

• $250.35
• $1,102.98
• $1,353.33
• $1,502.10

How much did this person pay towards Medicare in this pay period only?

• $19.62
• $40.82
• $117.72
• $244.92

How frequently is this employee paid?

• Daily
• Weekly
• Every other week
• Monthly