Taxes - Unit Test

First Name:

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Last Name:

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Hour/Class:

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1. 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

2. 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

3. 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

4. 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?
• What state do you live in?
• Are you claimed as a dependent on anyone else's tax return?

5. 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

6. What is the name of the tax form that requires you to provide identification and proves you are eligible to work in the U.S.?

• I-9
• 1099
• 1040
• W-4

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

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