Personal Finance Final Exam

Which of the following are the three largest categories of federal government spending?

• Infrastructure, Defense, and Science
• Health, Military, and Interest on Debt
• Veterans, Infrastructure, and Education
• Education, Defense, and Food/Agriculture

What does the term "withholding" mean in reference to your paycheck?

• It is the amount of your paycheck that you are NOT being taxed on.
• It is how much is being taken out of your paycheck in taxes.
• It is how much you are going to owe the government when you file your annual tax return.
• It is how much you earn and includes salary, bonus and commissions.

When do you start paying taxes?

• When you turn 18
• When you make more than the minimum income requirement
• When you get a full-time job (part-time does not count)
• When you are notified by the IRS that you are required to pay federal income taxes

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

• Making even one mistake on your federal taxes can result in your being convicted of a crime
• The 1040 form determines whether you owe additional taxes or are entitled to receive a refund from the government
• Completing the 1040 incorrectly will mean the wrong amount of taxes will be withheld from your paychecks going forward
• Mistakes on your 1040 form make you ineligible for employment during the next year

You are starting your first job and you are asked to complete some paperwork on your first day. Which form will determine how much money is withheld from your paycheck for federal and state income taxes?

• W-2
• W-4
• I-9
• 1040

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

• Social Security
• Medicare
• 401(k) contribution
• Federal income taxes

What form am I? I am received when you start a job. You use me to prove that you are eligible to work in the U.S., and you must provide forms of identification when submitting me.

• I-9
• 1099
• 1040
• W-4

Which of the following statements about this W-2 is true?

• Avia Consulting will use this W-2 to file their 1040 form
• Lily paid state income taxes of $1,189.90
• Lily earned about $117,000 over the year based on the total of her Wages, Social Security wages, and Medicare wages
• Lily works in the same city that Avia Consulting is based in

Elaine is an employee. Which of the following steps is she responsible for?

• Determine how much tax to withhold based on W-4 information
• Complete a W-4
• Send withholding amounts to the federal government
• Request a W-2 annually

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
• The W-2 includes information about the interest you earned from your investments