Understanding Tax and Economics Vocabulary

What is tax withholding?

• The process of filing your annual tax return

• The process of paying your income tax as you earn your income

• The process of receiving a tax refund

• The process of calculating your total income

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DOK Level 1: Recall

Who can be considered a dependent for tax purposes?

• Anyone over the age of 24

• Someone financially independent

• Someone under age 19 or a student until age 24

• Anyone who files their own tax return

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DOK Level 1: Recall

What is the purpose of Form W-4?

• To report how much in federal taxes were withheld for the year

• To file your annual income tax return

• To detail all "non-employee" compensation

• To tell employers how much to withhold in income tax

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DOK Level 1: Recall

How does Form W-2 help taxpayers?

• It helps them calculate their total income

• It reports how much in federal taxes were withheld for the year

• It provides a summary of all deductions

• It is used to apply for tax refunds

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DOK Level 1: Recall

What does a tax refund indicate?

• That taxpayers underpaid in income taxes

• That taxpayers overpaid in income taxes

• That taxpayers paid the exact amount of income taxes

• That taxpayers need to file an amended return

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DOK Level 1: Recall

How might behavioral economics influence consumer decisions?

• By providing tax incentives

• By affecting why someone buys something

• By setting fixed prices for goods

• By regulating market competition

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DOK Level 2: Skill/Concept

What is the primary use of Form 1040?

• To report non-employee compensation

• To file annual income tax returns

• To apply for a tax refund

• To calculate excise taxes

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DOK Level 1: Recall

In what scenario would you receive a 1099 form?

• When you are a full-time employee

• When you receive non-employee compensation

• When you pay excise taxes

• When you file a joint tax return

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DOK Level 1: Recall

What is an excise tax?

• A tax on income

• A tax on property

• A tax paid on purchase

• A tax on inheritance

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DOK Level 1: Recall

Analyze how tax withholding can impact an individual's financial planning throughout the year.

• It has no impact on financial planning

• It ensures that individuals receive a larger paycheck

• It affects the amount of disposable income available each month

• It guarantees a tax refund at the end of the year

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DOK Level 3: Strategic Thinking