Navigating Paychecks and Taxes for Financial Literacy

What is the term for the total amount of money earned before any deductions?

• Taxable income

• Net pay

• Optional deductions

• Gross pay

What is net pay?

• The amount after taxes and deductions

• Your salary before taxes

• Money set aside for retirement

• The total amount of taxes you owe

Why is it important to understand your pay stub?

• To compare salaries with coworkers

• To ensure you're being paid correctly

• To track your work hours

• To know how much vacation time you have

Which of the following is NOT a mandatory deduction from your paycheck?

• Health insurance

• Social Security

• Federal income tax

• State income tax

What are optional deductions?

• Federal and state income taxes

• Mandatory health insurance fees

• Taxes required by law

• Voluntary contributions to retirement accounts

How can pre-tax deductions benefit you financially?

• Increase your tax refund

• Lower your taxable income

• Decrease your gross pay

• Increase your net pay

What does Medicare provide funding for?

• Education

• Retirement savings

• Healthcare costs

• Unemployment benefits

What is the purpose of Social Security taxes?

• To fund public education

• To provide income for retirees

• To support healthcare research

• To pay for national defense

Which type of work might not have taxes automatically withheld?

• Full-time employment

• Government jobs

• Freelance or gig work

• Part-time employment

What should you do if you earn money from a job where taxes are not withheld?

• Ignore it if it's under a certain amount

• Pay taxes directly to the government

• Request your employer to withhold taxes

• Only report it if you're audited