Taxes and Your Paycheck - Unit Test

1. Why should you accurately complete a W-4 form any time you start a new job or change your tax status?

• You need a copy of your W-4 to file your tax return annually
• Your W-4 determines how much Federal income tax money your employer should withhold
• Your W-4 determines your total tax bill at the end of the year
• Completing a W-4 will guarantee you receive a large tax refund

2. Jay filed his taxes and found out he owes money. What is the most reasonable explanation as to why he owes money in taxes?

• Not enough money was withheld from his paychecks.
• Too much money was withheld from his paychecks.
• When filing his taxes, Jay accidentally checked “Married filing jointly” instead of “Single”.
• The IRS is asking Jay for a future advance on his possible taxes for next year.

3. The Federal government spends the most amount of tax money on...

• Science
• Veterans
• Education
• Health

4. Which of the following people might want to claim EXEMPT on their W-4 form?

• John, who is 20 and expects to earn $13,300 from his internship.
• Stacey, who is 16 and expects to earn $7,500 from her part-time job.
• David, who is 23 and expects to earn $15,000 from his part-time job.
• Hannah, who is 25 and expects to earn $55,000 from her full-time job.

5. All of the following are factors that impact the amount someone may pay in taxes EXCEPT...

• Income
• Political party
• State
• Marital status

6. Which of the following is the largest source of income for the Federal government?

• Payroll tax
• Income tax
• Corporate tax
• Property tax

7. Which person should expect to receive a W-2 form from their employer by January 31st, 2023?

• Marcy, who has sold handcrafted vases online for the past 5 years
• Jose, whose first job started on January 10, 2023
• Arnie, who did an unpaid internship in summer 2022 for a local newspaper
• Kelly, who has worked for the same department store for the last 15 years

8. Which of the statements about the current U.S. tax system is TRUE?

• Our current system is described as being a progressive system because it imposes higher rates on those who earn more.
• Your friend tells you his marginal tax rate is 22%. That means that he pays 22% on all of his income.
• Everyone in the US who makes more than the minimum income requirement pays one flat tax rate.
• Our current system is described as being a regressive system because it imposes higher rates on those who earn less.

9. Jeremy just started a new job and completed his W-4 form. Who should he submit it to?

• His employer
• His spouse
• The IRS
• No one - he keeps it for his records

10. All of the following information should appear on your W-2 form EXCEPT...

• Your name, address, and employer information
• Your interest earned on savings and investments
• Your wages, tips, and compensation from that particular employer
• The amount you paid during the last year for Medicare and Social Security