Quiz about Employment and Income Taxes

Question 1

What is net pay?

Accepted Answer

B. The amount of money you're paid after all taxes and deductions are taken out of your paycheck.

Answer

A. The amount of pay earned for the total number of hours worked.

Answer

C. The amount of money you're paid before all taxes and deductions are taken out of your paycheck.

Answer

D. Your gross pay plus any bonuses.

Question 2

What is the difference between gross and net pay?

Accepted Answer

B. Gross pay is before taxes are subtracted but net pay is after taxes are taken out.

Answer

A. Gross pay is after taxes are subtracted but net pay is before taxes are taken out.

Answer

C. Gross and net pay are basically the same things.

Answer

D. Net pay is a salary and gross pay is from hourly wages.

Question 3

The amount of money you're paid, after all taxes and deductions are taken out of your paycheck is called ________.

Accepted Answer

B. net pay

Answer

A. gross pay

Answer

C. total pay

Answer

D. year-to-date pay

Question 4

Which of the following is NOT a possible tax or deduction that could be withdrawn from your paycheck?

Accepted Answer

A. Restaurant tax

Answer

B. Federal income tax

Answer

C. FICA

Answer

D. Contributions to retirement savings

Question 5

Which of the following is NOT a possible tax or deduction that could be withdrawn from your paycheck?

Accepted Answer

D. Sales tax

Answer

A. State income tax

Answer

B. Contributions to retirement savings

Answer

C. FICA

Question 6

Which of the following is NOT a possible tax or deduction that could be withdrawn from your paycheck?

Accepted Answer

B. Overtime pay

Answer

A. FICA

Answer

C. Federal income tax

Answer

D. Contributions to retirement savings

Question 7

What is the purpose of the W-4 form?

Accepted Answer

C. To inform your employer of how much federal income tax to withhold from your paychecks.

Answer

A. To file your tax return.

Answer

B. To determine how much your gross pay should be.

Answer

D. To avoid paying income taxes on your paychecks.

Question 8

The W-4 tax form is used to ___________.

Accepted Answer

A. tell your employer how much federal income tax to withhold from your paychecks to send to the IRS.

Answer

B. determine how much your gross pay should be.

Answer

C. file your tax return.

Answer

D. avoid paying income taxes on your paychecks.

Question 9

When you start a new job, you fill out a W-4 form to _________.

Accepted Answer

D. to determine how much federal income tax your employer should withhold from your paychecks.

Answer

A. determine how much your gross pay should be.

Answer

B. file your tax return.

Answer

C. avoid paying income taxes on your paychecks.

Question 10

Your employer sends you a _______ form that tells you how much you've made and

how much you've paid in taxes in the last year.

Accepted Answer

B. W-2

Answer

A. 1040

Answer

C. W-4

Answer

D. W-9

Question 11

What does the W-2 form tell you?

Accepted Answer

A. How much you've earned and how much taxes you've paid in the last year.

Answer

B. When to file your tax return.

Answer

C. How much federal income tax your employer will withhold from your paycheck.

Answer

D. How often your employer will be paying you.

Question 12

The W-2 form is a form that tells you _______.

Accepted Answer

D. how much taxes you've paid in the last year based on how much you've earned.

Answer

A. how often you will be paid.

Answer

B. how much taxes you owe to the federal government.

Answer

C. how much taxes to withhold from your paycheck.

Question 13

Which of the following statements is true about taxes?

Accepted Answer

A. Taxes pay for schools first responders and roads.

Answer

B. Taxes pay toll road fees and office buildings.

Answer

C. Taxes are only collected by the federal government.

Answer

D. Taxes are only collected by state governments.

Question 14

What do taxes pay for?

Accepted Answer

A. Schools, government departments, roads, and emergency services

Answer

B. Privately-owned businesses

Answer

C. Operation of financial institutions

Answer

D. None of the above

Question 15

How does the government pay for roads, schools, and emergency services?

Accepted Answer

B. They are funded through taxes.

Answer

A. They are funded through non-profits.

Answer

C. They are funded through charitable donations.

Answer

D. None of the above

Question 16

Why might preparing taxes be different for people living in different states?

Accepted Answer

B. Everyone must file federal taxes, but each state has different tax laws.

Answer

A. Everyone must file state taxes but depending on where you live, you may not need to file federal taxes.

Answer

C. It's not different. All states have the same tax laws.

Answer

D. State taxes are due January 1st but federal taxes are due April 15th.

Question 17

Each year, you must file ____________________.

Accepted Answer

C. your federal taxes and state taxes if your state requires it

Answer

A. only your federal taxes since state taxes get filed every other year

Answer

B. only your state taxes since federal taxes are filed every four years

Answer

D. your federal, state, county and town taxes

Question 18

To file your federal and state taxes you ____________

Accepted Answer

D. must prepare different forms for each type of government (if your state requires it)

Answer

A. must prepare the same tax forms for both

Answer

B. can use tax preparation software for federal taxes, but can't for state taxes

Answer

C. can use tax preparation software for state taxes, but can't for federal taxes

Question 19

Tax preparation software can help prepare and file your taxes by _________.

Accepted Answer

B. posing questions to collect necessary information

Answer

A. making an appointment with a tax expert for you

Answer

C. calculating your taxes based on your savings account balance

Answer

D. providing you with blank tax forms you can fill out

Question 20

Why is it necessary to have a W-2 or 1099 form when using tax preparation software?

Accepted Answer

C. These forms report income which needs to be used to file taxes.

Answer

A. They highlight job performance which can reduce your tax rate.

Answer

B. They include passwords for tax preparation software.

Answer

D. They show how much you have donated to charities.

Question 21

Why is it useful to have your bank account and routing numbers when using tax preparation software?

Accepted Answer

A. To indicate where tax refunds should be sent.

Answer

B. To show how much interest you have earned over the year.

Answer

C. To use as additional forms of identification.

Answer

D. To show much money you have paid in taxes.

Question 22

Deductions and credits can _______ what you owe in taxes each year.

Accepted Answer

B. reduce

Answer

A. increase

Answer

C. double

Answer

D. share with others

Question 23

If you have to decide to claim a credit or deduction on your taxes which should you take?

Accepted Answer

B. Claim all deductions and credits that you are eligible for since they both can reduce your taxes.

Answer

A. Claim only deductions since credits are charged to you can can result in big bills later.

Answer

C. Only claim credits since deductions reduce the amount of money in your tax refund.

Answer

D. Claim both since they document how much in taxes you have paid.

Question 24

When preparing your taxes, what can possibly help reduce the amount of taxes that you owe?

Accepted Answer

D. Credits and deductions

Answer

A. Stock and savings interest

Answer

B. Sharing what you earned on a W-2 or 1099 form

Answer

C. Having stock dividends

Question 25

Your salary is one thing to consider when reviewing a job offer but benefits are also important. Which of the following would NOT be a part of your benefits package?

Accepted Answer

A. Free technology equipment

Answer

B. Disability Insurance

Answer

C. Paid time off

Answer

D. Healthcare insurance

Question 26

Your salary is one thing to consider when reviewing a job offer but benefits are also important. Which of the following would NOT be a part of your benefits package?

Accepted Answer

C. FICA

Answer

A. disability insurance

Answer

B. matching contributions to a retirement account

Answer

D. healthcare insurance

Question 27

Healthcare, paid time off, disability insurance, and matching contributions to a retirement account are all types of _________ available from your employer.

Accepted Answer

A. benefits

Answer

B. pensions

Answer

C. deductions

Answer

D. allowances

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