Payroll and Tax Quiz

Each of these is a common payroll deduction EXCEPT...

• Office supplies and equipment

• Federal income taxes

• FICA

Kiki receives a paycheck for 15 hours of work at a rate of $20 per hour. Her paystub lists 401(k) withholdings of $40, FICA of $20, federal income taxes of $26, and a healthcare payment of $8. What is Kiki's net pay?

• $206

• $300

• $394

Which expenditures make up the greatest share of state spending?

• Education and health care

• Transportation and corrections

• Low-income assistance and pensions

Lamar made $92,000 as a data analyst his first year out of college. He calculated his above-the-line deductions to be $5,500, his itemized deductions to be $7,000, and the standard deduction is $12,950. What deductions is Lamar allowed to take that will minimize his taxes owed?

• Above-the-line deductions and itemized deductions totaling $12,500

• Standard deduction only

• Itemized deductions only

Which statement best describes the difference between being paid a wage versus being paid a salary?

• A wage is an hourly rate below $20 per hour, while a salary is an hourly rate above $20 per hour.

• A wage is paid based on how many hours you work, while a salary is a fixed amount paid regardless of the number of hours.

• A wage is paid every two weeks, while a salary is paid monthly.

Who should consider completing a W-4 form?

• Aaliyah, who wants to enroll in her company's 401(k) program for the first time.

• Bruno, who just adopted a baby and wants to adjust his tax withholdings.

• Carter, who is considering a career change and wants to update his resume.

Which of the following is true about state taxes?

• States can levy property taxes and sales taxes, but not income taxes.

• Sales tax rates are the same in all states, but income tax rates are different.

• The largest state programs funded by state taxes are education and healthcare.

Payroll taxes are different from income taxes in all of the following ways, EXCEPT...

• Payroll taxes are regressive, while income taxes are progressive

• Payroll taxes fund the Social Security and Medicare programs, while income taxes fund government programs more broadly

• Payroll taxes scale upward with income, while income taxes are a flat rate across all earning levels

All of the following are reasons that you might receive a 1099 statement EXCEPT...

• Working as a full-time employee for a business

• Receiving unemployment benefits

Georgia completed her taxes and found that she owes $1,941 in federal taxes. If her taxable income for the year was $16,175, what is her effective tax rate?

• 10%

• 12%

• 18%