paycheck

Front

What is a W-4 form?

Back

A W-4 form is a tax form that employees fill out to inform their employer of the amount of tax to withhold from their paycheck based on their allowances.

Front

Why is it important to fill out a W-4?

Back

It helps your employer determine what percentage of your income should be deducted for taxes.

Front

What does the term 'gross pay' mean?

Back

Gross pay is the total amount of money earned by an employee before any deductions are made.

Front

What is 'net pay'?

Back

Net pay is the amount of money an employee takes home after all deductions, including taxes, have been subtracted from gross pay.

Front

What are 'mandatory deductions'?

Back

Mandatory deductions are required payments to the government, such as federal taxes, state taxes, and FICA tax.

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What are 'voluntary deductions'?

Back

Voluntary deductions are amounts that employees choose to have withheld from their paychecks, such as contributions to retirement plans or health insurance.

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What is the purpose of taxes?

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Taxes are required payments to the government used to fund public services and infrastructure.

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What is the difference between federal and state taxes?

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Federal taxes are collected by the national government, while state taxes are collected by individual state governments.

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What is FICA tax?

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FICA tax is a federal payroll tax that funds Social Security and Medicare.

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What does 'allowances' mean in the context of a W-4?

Back

Allowances are used to determine how much tax should be withheld from an employee's paycheck; more allowances mean less tax withheld.