Exam Review (Taxes) - 2024

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

• It is the amount of your paycheck that you are NOT being taxed on.
• It is how much is being taken out of your paycheck in taxes.
• It is how much you are going to owe the government when you file your annual tax return.
• It is how much you earn and includes salary, bonus and commissions.

When do you start paying income tax?

• When you turn 18
• When you make more than the minimum income requirement
• When you get a full-time job (part-time does not count)
• When you are notified by the IRS that you are required to pay federal income taxes

What is the difference between gross pay and net pay?

• Gross pay is before taxes and deductions are subtracted; Net pay is your take-home pay.
• Net pay is before taxes and deductions are subtracted; Gross pay is your take-home pay.
• There is no difference between gross and net pay.

What does FICA consist of?

• Health Insurance
• Social Security & Medicare
• Federal & State Taxes
• Employer Sponsored Retirement

How do employers figure out how much federal income tax to withhold from your paycheck?

• It is set by a federal regulation at 7.65%
• It is based on your previous year's tax return
• It is based on the information you have provided on your I-9 form
• It is based on the information you have provided on your W-4 form

What is the deadline for you to receive your W-2 from your employer?

• Within 30 days of hire
• Any time you request it in writing
• January 31st
• April 15th

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 federal and state income taxes?

• W-2
• W-4
• I-9
• 1040

What tax form am I? I am received when you start a job. You use me to prove that you are eligible to work in the U.S., and you must provide forms of identification when submitting me.

• I-9
• 1099
• 1040
• W-4

Upon completing your 1040, you realize that you owe the IRS $427. Each of the following is a possible way to pay the taxes you owe EXCEPT...

• Write a check and mail it to the IRS.
• Tell the IRS to take out more taxes next year to pay back the $427.
• Use your debit or credit card online or by phone.
• Set up a direct payment from your bank account.

When you complete your 1040 form, if you overpaid your taxes and the government owes you money, that is called a __________.

• withholding
• direct deposit
• deduction
• refund