Understanding Taxes and Social Security

What is the primary purpose of the W-4 form?

• To apply for a job

• To determine how much federal tax should be withheld from a paycheck

• To file annual tax returns

• To report income earned throughout the year

What is an exemption in terms of federal taxes?

• A tax penalty for late filing

• An amount of income that is not subject to taxation

• A mandatory payment to the government

• A deduction for student loan payments

What best describes an "Actual Paycheck"?

• The amount of money before taxes and deductions are taken out

• The amount of money paid to an employee after all deductions

• A document used to report income to the IRS

• A check issued by the employer without tax deductions

What is Direct Deposit?

• A method of electronically transferring wages into an employee’s bank account

• A physical check issued by an employer

• A tax form used to report earnings

• A payroll deduction for retirement savings

What is the purpose of Social Security?

• To provide financial assistance to individuals who are unemployed

• To offer income support for retired workers, disabled individuals, and survivors of deceased workers

• To help pay for medical expenses for all U.S. citizens

• To fund education programs in the United States

What is one major funding problem for Social Security?

• Too many people are paying into the system

• The number of retirees is growing while the number of workers contributing is decreasing

• The Social Security tax rate is too high

• The government has surplus funds for Social Security

What is the purpose of Medicare?

• To provide health insurance for individuals age 65 and older or with certain disabilities

• To give free healthcare to all U.S. citizens

• To replace private health insurance

• To offer temporary disability benefits

What does Medicare coverage include?

• Only prescription medications

• Hospital and medical insurance for eligible individuals

What is covered under Medicare?

• All medical expenses

• Only hospital and medical insurance

• Dental and vision care for all Americans

• Only emergency medical expenses

What is a major Medicare funding issue?

• There are too few people enrolling in Medicare

• Medicare expenses are increasing faster than the funds available to support it

• The Medicare tax rate is too high

• Medicare only covers unemployed individuals