Taxes Unit Test

When do you start paying income taxes?

• When you turn 18

• 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

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

• What type of income did you earn this year?

• What state do you live in?

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

Elaine just accepted a new job and is working with the company's HR department to fill out paperwork. Which of the following steps is she responsible for?

• Determine how much tax to withhold from her paychecks based on W-4 information

• Complete a W-4 form

• Send withholding amounts to the federal government

• Complete a W-2 form

If you overpaid your taxes and the government owes you money, that is called a

Answer explanation

Refund

Your friend Laila is talking to you about the benefits of tax filing websites. Which of the following is true?

• Filing your taxes using a website is always free of charge

• You are guaranteed a higher refund than if you were to use a paper form or hire a professional

• If you owe money to the IRS, you receive a discount if you e-file use a tax filing website

• You can avoid the costs of having to pay a professional, though you may have to pay for e-filing online

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

• An adult who financially supports you

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

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

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

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

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