Unit 5 - Employment & Taxes Study Guide

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

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

• 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

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

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

• 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?

• How much income did you earn this year?

Elaine just accepted a new job and is working with the company’s HR department to fill out paperwork. Which of the following steps is she responsible for?

• Determine how much tax to withhold from her paychecks based on W-4 information

• Complete a W-4 form

• Send withholding amounts to the federal government

• Complete a W-2 form

What is the name of the tax form that requires you to provide identification and proves you are eligible to work in the U.S.?

• I-9

• 1099

• 1040

• W-4

James paid state income taxes of $2,489.90

• True

• False

James paid state income taxes of $1,189.90.

• True

• False

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

• withholding

• direct deposit

• deduction

• refund

What was the net (or take-home) pay for this employee for this pay period?

• $335.10

• $400.00

• $2,680.80

• $3,200