Unit 9 Test Employment and Income

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

• How much is being taken out of your paycheck for things like taxes, employer sponsored health insurance, and retirement

• How much you earn and includes salary, bonus and commissions

• The amount of your paycheck that you are NOT being taxed on

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 taxes?

• W-4

• W-2

• 1040

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

• Federal income taxes

• 401(k) contribution

• Medicare

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?

• Complete a W-4 form

• Send withholding amounts to the federal government

• Complete a W-2 form

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

• An adult who financially supports you

• Someone who is temporarily disabled

• A child or adult that you support financially

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

• 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

• 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

On a pay stub, the amount of money that is left after withholdings is known as…

• Annual earnings

• Gross pay

• Net pay

Which of the following statements most accurately describes why it’s important to correctly fill out a W-4 form?

• If you pay the exact right amount in taxes, you receive a tax credit in the following year

• It is a legally binding contract between you and your employer that determines how much they pay you

• It determines how much money is withheld from your paycheck and can result in under or overpayment of taxes if filled out incorrectly

You will need to include all of the following information on a W-4 form EXCEPT…

• Marital status

• Social Security number

• Earned income from previous job