Understanding Taxes

When do you start paying income taxes?

• When you turn 18

• When you get a full-time job (part-time does not count)

• When you make more than the minimum income requirement

Why is it important to be extremely careful when completing your 1040 form?

• Making a mistake will disqualify you from receiving future refunds

• The 1040 form determines whether you owe additional taxes or are entitled to receive a refund from the government

• Mistakes on your 1040 form make you ineligible for employment during the next year

Which of the following paycheck withholdings puts money into a retirement investment fund that you will manage?

• Social Security

• Medicare

• 401(k) contribution

When determining whether you NEED to file a federal tax return, each of these questions matters EXCEPT...

• How much income did you earn this year?

• What type of income did you earn this year?

• What state do you live in?

Which of the following describes what a "dependent" is for tax purposes?

• A child or adult that you support financially

• Someone who is temporarily disabled

• Someone who is a full-time student under the age of 30

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

• withholding

• direct deposit

• refund

Your friend Laila is talking to you about the benefits of tax filing websites. Which of the following is true?

• Filing your taxes using a website is always free of charge

• You are guaranteed a higher refund than if you were to use a paper form or hire a professional

• You can avoid the costs of having to pay a professional, though you may have to pay for e-filing online

If a taxpayer fills out their W-4 in a way that does not withhold enough money to cover their tax obligation, what is the most likely outcome after they file their taxes?

• They will owe a payment to the IRS

• They will be audited

• They will be charged with tax evasion

Which of the following statements about the W-2 form is TRUE?

• A W-2 lists all the money you earned in cash over the last year

• The total wages you earned from ALL jobs you worked in the previous year appear on ONE W-2 form

• You need a separate W-2 form from EACH of your employers in order to file your taxes