Review: Compensation & Taxes

Match the following

• You get one of these if you are not an employee but were paid by a company (like contract work)

• 1040

• It is used to determine how much money you get taken out of each paycheck

• W-4

• It tells you how much you earned and how much you paid in taxes; received in January

• I-9

• Completed every April; it's A LOT to fill out

• W-2

• It is used to prove that you are eligible to work in the United States

• 1099

Answer explanation

You can find these answers on the "Tax Forms & Their Purposes" worksheet.

​ An example of a benefit we receive as a result of government spending is credit card forgiveness.

• True

• False

Answer explanation

False. An example of a benefit we receive from government spending is clean water.

If there are untruthful answers on the I-9 form, the government can punish a person with fines or imprisonment.

• True

• False

Answer explanation

True.

You are required to submit certain documents along with your I-9 form in order to establish identity and employment authorization.

• True

• False

Answer explanation

True. You are required to submit documents like your state-issued ID, passport, etc.

You need to include earned income from your previous job on the W-4.

• True

• False

Answer explanation

False. Previous income is not relevant on the W-4.

You can refuse to disclose your social security number to your employer.

• True

• False

Answer explanation

False. You always have to provide this to your employer.

(a)   refers to how much is being taken out of your paycheck for things like taxes, employer sponsored health insurance, or retirement

• Withholding
• Deduction
• Direct Deposit
• Refund

Answer explanation

If money is taken out of your check before you receive it, it is WITHHELD. Therefore, it's called withholding.

FICA consists of ​ (a)   and ​ (b)   .

• Social Security
• Medicare
• Federal Taxes
• State Taxes
• Health Insurance
• Employer Sponsored Retirement

Answer explanation

FICA stands for Federal Insurance Contributions Act. The contributions you are making are for Social Security and Medicare.

A ​ (a)   is what the government owes you if you overpaid your taxes.

• refund
• deduction
• withholding
• direct deposit

Answer explanation

If you overpay the government, they send you a REFUND for the amount you overpaid.

Which of the following describes what a "dependent" is for tax purposes?

• A child or adult that you support financially

• Someone who is temporarily disabled

• An adult who financially supports you

• Someone who is a full time student under the age of 30

Answer explanation

Usually, a dependent is a child that you support financially. It can also be anyone else you support financially, though, like your elderly mother who has to live with you and has no income.