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How Taxes Work

Total questions: 92

Worksheet time: 1hrs 5mins

Name
Class
Date
1.

Used for verifying the identity and employment authorization of individuals hired for employment in the United States.

a)

W-2

b)

w-4

c)

I-9

d)

Resume

2.

The form that an employer must send to an employee and the Internal Revenue Service (IRS) by January 31st of each year.

a)

W-2

b)

W-4

c)

I-9

d)

Resume

3.

Means free from withholding of federal income tax.


a)

user tax

b)

taxation

c)

qualified

d)

exempt

4.
What are Taxes?
a)
A Sum of money that the Federal government pays its citizens for good behavior.
b)
A Sum of Money that the State Mandates its Businesses pay in order to support the cleaning of their parking lot. 
c)
A Sum of Money that the Federal Government charges its citizens to clean up their messes. 
d)
A sum of money that the State or Federal Government mandates its citizens pay in order to support the government itself and all of its services. 
5.

If a teen files a tax return, can the parent still claim him/her as a dependent?

a)

Yes. All teens are dependents until they are 18 years old

b)

No. If a teen files a tax return, he/she cannot be claimed

c)

Yes, as long as the teen meets the dependency requirements

d)

Yes, but the parent has to add the teen's income to theirs

6.
_______ pay is the total amount earned for a pay period.
a)
Net
b)
Gross
c)
Total
d)
Sales 
7.
When you combine Medicare and Social Security what Tax do you have?
a)
FICO
b)
FICE
c)
FACE
d)
FICA
8.
What is Property Tax
a)
Tax on Land, Vehicles and Property
b)
Tax on Government Buildings
c)
Tax on Businesses
d)
Tax on Educators
9.
What is the tax rate removed through payroll tax for Medicare
a)
1.65%
b)
1.25%
c)
1.45%
d)
1.50%
10.

What is the Social Security tax rate removed through payroll tax?

a)

6.15%

b)

6.20%

c)

6.45%

d)

6.50%

11.

What is the Social Security Program?

a)

A program that helps supplement the high medical costs after retirement.

b)

A supplemental retirement program where the government sends a check to a retiree at the Age of 67. (You can begin receiving at 62, however it will be at 70%)

c)

A benefit program that is taxable by the State Government.

d)

A program that sustains and secures

12.

What is Medicare

a)

A retirement supplement program

b)

A VA benefits program

c)

A program for Low-Income Families

d)

A medical benefits program that provides medical benefits for senior citizens.

13.
FICA taxes are
a)
U.S. federal payroll taxes imposed on both employees and employers to fund Social Security and Medicare
b)
U.S. federal payroll taxes imposed on employees only to fund Social Security and Medicare.
c)
U.S. federal payroll taxes imposed on both employees and employers to fund Social Security.
d)
U.S. federal payroll taxes imposed on employers only to fund Social Security and Medicare
14.

Required charges of citizens by local, state, and federal governments are called:

a)

social security taxes

b)

taxes

c)

payroll taxes

d)

paycheck deductions

15.
With this payment method, employers put the employee’s paycheck into the authorized employee’s bank account 
a)
paycheck
b)
payroll card
c)
direct deposit
d)
 all are the same
16.
The amount of money subtracted from the gross income for taxes. Typically about 30% of your paycheck
a)
social security
b)
medicare
c)
payroll withholdings
d)
income tax withholdings
17.
Helps provide retirement income for the elderly and pays disability benefits
a)
medicare
b)
social security
c)
state income tax
d)
federal income tax
18.
Also known as take home pay, this is the amount left after all payroll deductions have been taken from the gross income
a)
gross pay
b)
withholdings
c)
net pay
d)
real pay
19.
Totals all of the deductions which have been withheld from an individual’s paycheck from January 1 to the last day of the pay period indicated on the paycheck stub
a)
payroll withholdings
b)
income tax
c)
social security
d)
year to date
20.

Salaries, wages and tips and represent what type of income?

a)

Dividend income

b)

interest income

c)

adjustable gross income

d)

earned income

21.

On the W-4, as a dependent minor, you can claim yourself.

a)

True

b)

False

22.

Which tax do you pay when you pay FICA?

a)

inheritance tax

b)

excise tax

c)

payroll tax

d)

None of the above

23.

The federal agency that collects income taxes in the United States. IRS stands for

a)

Internal Revenge Service

b)

International Revenue System

c)

Internal Revenue Service

d)

Inspection Ravioli Sauce

24.

Money being taxed comes from what type of pay?

a)

Net Pay

b)

Gross Pay

c)

Take Home Pay

d)

Pay As You Go

25.

The official date for when taxes are due

a)

January 15

b)

February 15

c)

March 15

d)

April 15

26.

The easy way to file for taxes is using form

a)

1800

b)

1745

c)

1999EZ

d)

1040EZ

27.

A source of income for workers who have lost their job through no fault of their own

a)

Employee Benefits

b)

Workers Compensation

c)

Unemployment Insurance

28.

What is the purpose of an I-9 form?

a)

To prove citizenship.

b)

To prove you are here legally.

c)

To prove you are of age.

29.

Who primarily uses our tax money? ( Select two answers)

a)

Your employer

b)

The state government

c)

The Federal government

d)

Local Businesses

30.

Our tax money is spent on all of the following EXCEPT:

a)

Social Security

b)

The Military

c)

Private School Education

d)

National Parks

31.

What is the purpose of the W-4 form?

a)

lets the government know how much you paid in taxes last year

b)

lets your employer know how much to withhold from your paycheck

c)

lets the 3 major credit bureaus know how many dependents you have

d)

lets you know how much you paid in taxes last year

32.

The more allowances you claim on your W-4...

a)

The more money you will see in your paycheck

b)

The less money you will see in your paycheck

c)

The # of allowances has no impact on your paycheck

d)

You don't claim allowances on a W-4

33.

What do you need to file your 1040 or 1040EZ form? (hint: choose 2 correct answers)

a)

Your W-2

b)

Your W-4

c)

Your prior year's tax return

d)

Social Security Number

34.
____________is the amount of money you earn before deductions.
a)
net income
b)
gross income
35.
The money you earn after deductions is called _______________.
a)
gross income
b)
net income
36.

Payroll Tax is-

a)

the amount of money you actually get to take home

b)

FREE MONEY

c)

tax taken out of your paycheck by your employer or boss

d)

tax when you buy something

37.

Which tax provides for medical benefits?

a)

FICA Tax

b)

Federal Income Tax

c)

Social Security Tax

d)

Medicare Tax

38.

How much income tax do employers withhold from employee pay?

a)

6.2% of gross pay

b)

Employers use the information on Form W-4 to compute income tax withholding

c)

1.45% of gross pay

d)

7.65% of gross pay

39.

Net pay

a)

is more than gross pay.

b)

is also known as take-home pay.

c)

is gross pay minus 7.65%.

d)

depends on how much the employee wants to pay in Social Security taxes

40.

Employees decide when to pay their payroll taxes. (True/False)

a)

True

b)

False

41.

Federal income taxes are used to pay the interest on the national debt. (True/False)

a)

True

b)

False

42.

Employees use Form W-4 to prove that eligibility to work in the United States. (True/False)

a)

True

b)

False

43.
What is Federal Income Tax?
a)
Funds the Disney Corporation with money it needs to operate. 
b)
Money that supports the Executive, Legislative, and Prejudicial branch of the government.
c)
A tax that supports the air traffic navy platoon system, the national board of realtors as well as the web of excessive disproportionate growth. 
d)
A tax that supports the federal governmen all its systems, highway construction and the military. 
44.
What is State Income Tax?
a)
Taxes Paid by the Federal Government
b)
Taxes Mandated by the Federal Government
c)
Taxes Mandated by the State Government to pay for the Legal System in the United States
d)
The Taxes that pay for Schools, Libraries, and Police Departments
45.
Fringe benefits may include all of the following except?
a)
Paid holidays
b)
Sick leave
c)
Vacation time
d)
Income
46.
What do taxes collected under the Federal Insurance Contributions Act (FICA) fund?
a)
Medicaid & Supplemental Security Income
b)
Medicare & Medicaid
c)
Social Security & Medicare
d)
Social Security & Medicaid
47.
Sally owns a gas station.  What type of tax will she have to pay on the land that the gas station is on? 
a)
Property Tax
b)
Payroll Tax
c)
Income Tax
d)
Sales tax
48.
Frank's parents own their house. Which type of tax will Frank's parents pay annually?
a)
Property Tax
b)
Payroll Tax
c)
Income Tax
d)
Sales tax
49.
Income tax is-
a)
Money your employer pays to you
b)
Money you earn and put into the bank
c)
Tax paid on the money you earn annually
d)
Money you pay to your employee
50.
Mr. Keen earns $4,350 each month.  However when he gets his paycheck it is always less than $4,350, because taxes have been taken out of his paycheck.  What type of tax is this?
a)
Income
b)
Property
c)
Payroll
d)
Sales
51.
This is a tax on retail items 
a)
Income
b)
Property
c)
Payroll
d)
Sales
52.
Payroll Tax is-
a)
the amount of money you actually get to take home
b)
FREE MONEY
c)
tax taken out of your paycheck by your employer or boss
d)
tax when you buy something
53.
Which tax form is used  to provide information about your previous year's pay and deductions from that year?
a)
W2
b)
W4
c)
1040A
d)
1099-INT
54.
Who is responsible for providing the W2 form?
a)
You
b)
Your Employer
c)
Your bank
d)
The IRS
55.
Which tax form must you use if you make more than $100,000 per year?
a)
1040EZ
b)
1040A
c)
1040
56.
Which tax form should you use if you make less than $100,000 per year, do not itemize your deductions and have an interest income that is less than $1500 for the year (hint: the simplest tax form to complete)?
a)
1040 EZ
b)
1040 A
c)
1040
d)
1040 B
57.
When is tax day?
a)
January 1st
b)
April 1st
c)
April 15th
d)
December 31st
58.
What does 6.2% look like as a decimal?
a)
6.2
b)
0.062
c)
0.62
d)
0.0062
59.
What does 1.45% look like as a decimal?
a)
1.45
b)
0.145
c)
0.0145
d)
0.00145
60.
What is the first document an employer will have you complete?
a)
1040
b)
1040EZ
c)
W4
d)
W2
61.
Which form will be easiest for a single person with no dependents to complete when filing taxes?
a)
1099
b)
1040EZ
c)
1040
d)
W2
62.
__________ is the deadline for employers to provide you with the W2.
a)
January 31st
b)
April 15th
c)
January 15th
d)
April 31st
63.

Which of the following forms is a summary of what you made & what you paid? Hint: You DON'T fill it out, but it IS needed in order to file your taxes

a)

W2 Form

b)

W4 Form

c)

1040EZ

d)

I9 Form

64.

Which of the following forms is meant to determine your allowances / withholdings / deductions and affects your FEDERAL and STATE income tax %? Hint: YOU fill it out

a)

W2 Form

b)

W4 Form

c)

1040EZ

d)

I9 Form

65.

Which of the following forms is the actual form you fill out when you file your taxes?

a)

W2 Form

b)

W4 Form

c)

1040EZ

d)

I9 Form

66.

The amount of money your employer holds back for payment to the government for taxes.

a)

Tax credit

b)

Tax items

c)

Payroll deductions

d)

withholding

67.

The number you claim that directs your employer you need to be allowed to receive more money on each paycheck.

a)

payment claims

b)

credits

c)

deductions

d)

allowances

68.

You move up in _____ as your taxable income increases.

a)

tax brackets

b)

credits

c)

refund amount

d)

allowances

69.

When one receives a letter in the mail from the IRS requesting tax documentation. Which term describes this process?

a)

Audit

b)

Tax evasion

c)

Tax exemption

d)

Proportional tax

70.

Your paycheck is largest if you elect which of the following allowances on your Form W4?

a)

4

b)

2

c)

5

d)

3

71.
Single, Married Filing Joint, and Head of the Household are all examples of___ on a tax return.
a)
filing status
b)
standard deductions
c)
itemized deductions
d)
dependents
72.

If you don't pay enough in federal taxes for the year you will need to pay the federal govt.

a)

true

b)

false

73.

If you paid too much in taxes, you will be able to get a refund if you fill out the correct forms.

a)

true

b)

false

74.

Claiming a lot of allowances means that you will get more taken out of your paycheck in taxes.

a)

true

b)

false

75.

Your tax bracket says something about how much income you have.

a)

true

b)

false

76.
Which tax form provides information on how much you have earned in interest on your savings tools, such as savings accounts?
a)
W2
b)
W4
c)
1040
d)
1099-INT
77.
Who provides you with the 1099-INT?
a)
You fill it out
b)
Your employer
c)
Your Bank
78.

Frank's parents own their house. Which type of tax will Frank's parents pay annually?

a)

Property Tax

b)

Payroll Tax

c)

Income Tax

d)

Sales tax

79.

Money the government brings in through taxes

a)

Revenue

b)

Deficit

c)

Debt

80.

Credits you may be able to deduct from your tax include, but are not limited to, child and dependent care, education, mortgage interest, residential energy, retirement savings contributions, and adoption.

a)

tax credit

b)

tax multiplier

c)

tax income

d)

tax subtraction

81.

tax that takes a larger percentage of income from people in higher-income groups

a)

progressive

b)

regressive

c)

flat

d)

proportional

82.

tax that takes a larger percentage of income from people in lower-income groups

a)

regressive

b)

progressive

c)

income

d)

flat

83.

money owed by the government to taxpayers when their total tax payments are greater than the total tax

a)

tax credit

b)

tax deduction

c)

tax refund

d)

tax audit

84.

take the same percentage of income from people in all income groups

a)

progressive taxes

b)

regressive taxes

c)

flat taxes

d)

proportional taxes

85.
A person, other than the taxpayer or spouse, who entitles the taxpayer to claim an exemption.
a)
dependent
b)
child
c)
employer
d)
student
86.
This determines the rate at which income is taxed
a)
filing status
b)
number of dependents
c)
salary
d)
exemption
87.

The pay stub is Ron's weekly pay stub. If his earnings and deductions remain the same for the rest of the year how much will be taken out of his total annual gross salary for Federal Income Tax?

a)

4,755.66

b)

9,511.32

c)

33,834.32

d)

16,917.16

88.

The pay stub is Ron's biweekly pay stub. If his earnings and deductions remain the same for the rest of the year how much will be taken out of his total annual gross salary for Retirement?

a)

6,500

b)

3,250

c)

4,680

d)

2,340

89.
What type of tax is taken out of our paycheck? 
a)
Sales
b)
Income
c)
Property
d)
Excise
90.
A _____ is someone who relies on another person to provide for them.
a)
Child
b)
Widow
c)
Independent
d)
Dependent
91.

What does FICA consist of?

a)

Health Insurance

b)

Social Security & Medicare

c)

Federal & State Taxes

d)

Employer Sponsored Retirement

92.

Who pays FICA Tax?

a)

only the employee

b)

only the employer

c)

both the employee and employer

d)

none

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