TC2--MSU Adulting: They Took What? Your First Paycheck and Taxes

What is the purpose of federal income tax?

• To fund state governments

• To fund federal government programs and services

• To pay for personal expenses

• To pay for local government services

Which of the following is typically withheld from your paycheck?

• Federal income tax

• State income tax (if applicable)

• Social Security and Medicare taxes

• All of the above

What is the standard deduction?

• A fixed amount that reduces your taxable income

• An amount added to your paycheck

• A tax credit that increases your refund

• A fee charged by the IRS

What is the difference between gross income and net income?

• Gross income is after taxes; net income is before taxes

• Gross income is before taxes; net income is after taxes

• They are the same

• Net income is higher than gross income

What is a W-2 form used for?

• To report your annual income and taxes withheld

• To apply for a job

• To claim dependents

• To calculate your refund

What is FICA?

• A tax credit for low-income individuals

• A federal program that provides unemployment benefits

• A federal law that sets minimum wage standards

• The Federal Insurance Contributions Act, which funds Social Security and Medicare

What is a W-4 form used for?

• To report your annual income

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

• To apply for a tax refund

• To report your state income tax

What is the deadline for filing your federal income tax return?

• January 1

• April 15

• June 30

• December 31

What is a tax refund?

• Money you owe to the IRS

• Money the IRS owes you if you overpaid your taxes

• Money you receive from your employer

• Money you receive for filing your taxes late

Which of the following is a good practice when managing your paycheck and taxes?

• Ignoring your pay stubs and tax forms

• Keeping track of your income and deductions

• Relying solely on your employer to manage your taxes

• Avoiding filing your taxes