3.02 Payroll Deductions Review

What is the purpose of FICA taxes?

• To fund personal retirement accounts

• To support state and local infrastructure projects

• To fund Medicare and Social Security programs

• To pay for federal income tax obligations

Who benefits from the Medicare and Social Security taxes collected?

• Retirees, people with disabilities, and children of deceased workers

• Only the employees who paid into the system

• The federal government's general fund

• State and local governments

What is the percentage rate for FICA taxes?

• 8.65%

• 7.65%

• 6.65%

• 5.65%

How is state income tax determined?

• Based on the state where the employer is located

• Based on the employee's choice of state

• Based on the state where the employee works or lives

• It is a flat rate across all states

Can you be taxed by both the state you work in and the state you live in?

• Yes, but only in certain states

• No, double taxation is not allowed

• No, unless you opt-in for it

• Yes, always

What is the main reason for local income taxes in big cities?

• To pay for local government projects and services

• To support public transportation systems

• To subsidize housing for city employees

• To fund city-specific healthcare programs

What is the purpose of FICA taxes?

• To fund personal retirement accounts

• To support state and local infrastructure projects

• To fund Medicare and Social Security programs

• To pay for federal income tax obligations

Which formula is for Net Pay?

• Gross Pay−Total

• Net Pay / Gross Pay

• 0.0765(Gross Pay)

• ( % ) (Gross Pay)

Which formula is for State or Local Tax?

• Gross Pay−Total

• Net Pay / Gross Pay

• 0.0765(Gross Pay)

• ( % ) (Gross Pay)

Which formula is for Social Security Tax (FICA)?

• Gross Pay−Total

• Net Pay / Gross Pay

• 0.0765(Gross Pay)

• ( % ) (Gross Pay)