Taxes Bell Ringer 4

All of the following people can be claimed as a dependent for tax purposes EXCEPT…

• A 23 year-old college student whose parents pay all of their expenses

• A 17 year-old high school student with a part-time job whose parents pay for all of their expenses

• A 20 year-old college student with a paid internship who pays for all of their own expenses

• A 25 year-old cousin with no job who has lived in your parent/guardian’s house for the last year

You are required to file a tax return in all of the following scenarios EXCEPT…

• You made $25,000 working a full-time job

• You made $3,000 from investments in the stock market

• You were self-employed and made $2,500

• You made $9,000 working a part-time job

What is the purpose of the self-employment tax (SECA)?

• To tax self-employed individuals a greater amount than regular employees since they’re more likely to make health insurance claims

• To tax self-employed individuals a lesser amount than regular employees since they generally make less money

• To tax self-employed individuals an equivalent amount for Social Security and Medicare since FICA taxes aren’t taken out of their paycheck

• To tax self-employed individuals a flat amount since they don’t pay federal or state income taxes

Marquis is starting a fast food job during his senior year of high school. He lives with his parents and they will claim him as a dependent on their taxes this year. He earns $2000. Based on how he completed his W-4, his employer withheld $200 in federal income taxes from his paychecks. What will happen if Marquis doesn't file taxes in April?

• The IRS will refund his $200 directly to him

• The IRS will refund his $200 to his parents

• The IRS will fine Marquis $75 or more for not filing taxes

• Nothing will happen, but Marquis will miss out on his potential refund

All of the following people would be required to file a tax return EXCEPT…

• Janet, who earned $28,200 but was paid entirely in cash

• Max, whose total income from three separate part-time jobs was $9,500

• Isaiah, who owns his own business and generated an income of $7,000

• Dani, who is a cafe barista and earned $18,000 in wages and $250 in tips

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

• An adult who financially supports you

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

Jessica is 16 years old and earned $1,100 through her photography side gig. Her parents can claim her as a dependent on their tax return. All of the following statements are true EXCEPT…

• Jessica is required to file an income tax return

• Jessica should expect to receive a W-2 in January

• Jessica is required to pay a 15.3% self-employment tax

• Jessica can file her own tax return even though her parents are claiming her as a dependent

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?

• Are you claimed as a dependent on anyone else's tax return?

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

• When you are notified by the IRS that you are required to pay federal income taxes