Income and Taxes Review

Mandatory government spending includes which of the following?

• Infrastructure and Science

• Medicare and Social Security

• Healthcare and Military

• Education and Agriculture

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

• 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

• 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

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

• 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

• Making a mistake will disqualify you from receiving future refunds

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

• 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

• Making a mistake will disqualify you from receiving future refunds

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

• Social Security

• 401(k) contribution

• Federal income taxes

• Medicare

Juanita has a part-time job that pays $12/hour and works about 50 hours every month. Her withholdings are Social Security (6.2%), Medicare (1.45%) and federal income tax (10%). What is her approximate net pay?

• $120

• $700

• $500

• $600

Which of the following describes what a "dependent" is for tax purposes?

• A child or adult that you support financially

• Someone who is temporarily disabled

• Someone who is a full-time student under the age of 30

• An adult who financially supports you

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 owe a payment to the IRS.

• They will receive a refund.

• The will receive an audit.

• They will be charged with tax evasion.

When you complete your 1040 form, if you overpaid your taxes and the government owes you money, that is called a __________.

• withholding

• refund

• deduction

• allowance

When determining whether you NEED to file a federal tax return, each of these questions matters EXCEPT…

• How much income did you earn this year?

• What type of income did you earn this year?

• Are you claimed as a dependent on anyone else's tax return?

• What state do you live in?