Module 1: Payroll Taxes and Federal Income Tax Withholding

Who completed Form W-4?

• Ahmed Khan

• The teacher

• The student

• The IRS

Is the taxpayer married or single?

How many allowances does the taxpayer claim?

What is the additional tax amount the employee wants to be withheld?

• $0

• $50

• $100

• Cannot be determined from the provided information

1. Which tax provides for medical benefits?

• FICA tax

• Federal Income Tax

• Social Security Tax

• Medicare Tax

2. How much income tax do employers withhold from employee pay?

• 6.2% of gross pay

• 1.45% of gross pay

• 7.65% of gross pay

• Employers use the information on Form W-4 to compute income tax withholding.

3. Net pay

• is more than gross pay.

• is also known as take-home pay.

• is gross pay minus 7.65%.

• depends on how much the employee wants to pay in Social Security taxes