Taxes

1. Which of the following are two mandatory categories of government spending that are paid for by FICA taxes?

• 1. Military and Education

• 1. Health and Veterans’ Benefits

• 1. Housing and Transportation

• 1. Social Security and Medicare

On a pay stub, the amount of money that is left after withholdings is known as…

• 1. Gross pay

• 1. Net pay

• 1. Annual earnings

• 1. Wages and tips

  
  

3. Which statement best describes discretionary government spending?

• 1. A fixed amount of money spent on the same categories every year

• 1. The money used to pay for Social Security and Medicare

• 1. A changing amount of money spent on different categories each year

• 1. Money that you determine how it is spent by the government when you submit your taxes

1. You recently accepted a new job and your first day is next week. What form will you have to complete before you receive your first paycheck?

• 1. W-2

• 1. 1040

• 1. 1099

• 1. W-4

2. You were unable to file your taxes before the April deadline and your application for an extension was approved. What month was your deadline extended to?

• 1. May

  
  

• 1. October

• 1. December

• 1. January

3. Which of the following statements most accurately describes why it’s important to correctly fill out a W-4 form?

• 1. It determines how much money is withheld from your paycheck and can result in under or overpayment of taxes if filled out incorrectly

• 1. It is a legally binding contract between you and your employer that determines how much they pay you

• 1. If you pay the exact right amount in taxes, you receive a tax credit in the following year

• 1. If you underpay your taxes, you’ll be responsible for additional penalties beyond your normal tax obligation

All of the following people can be claimed as a dependent for tax purposes EXCEPT…

• 1. A 23 year old college student whose parents pay all of their expenses

• 1. A 17 year old high school student with a part-time job whose parents pay for all of their expenses

• 1. A 20 year old college student with a paid internship who pays for all of their own expenses

• 1. A 25 year old cousin with no job who has lived in your parent/guardian’s house for the last year

2. You are required to file a tax return in all of the following scenarios EXCEPT…

• 1. You made $25,000 working a full-time job

• 1. You made $3,000 from investments in the stock market

• 1. You were self-employed and made $2,500

• 1. You made $9,000 working a part-time job

3. What is the purpose of the self-employment tax (SECA)?

• 1. To tax self-employed individuals a greater amount than regular employees since they’re more likely to make health insurance claims

• 1. To tax self-employed individuals a lesser amount than regular employees since they generally make less money

• 1. To tax self-employed individuals an equivalent amount for Social Security and Medicare since FICA taxes aren’t taken out of their paycheck

• 1. To tax self-employed individuals a flat amount since they don’t pay federal or state income taxes

  
  

1. All of the following people should receive W-2 forms EXCEPT…

• 1. Edgar, who works 10 hours/week cleaning pools for $15/hour at WeCleanPools

• 1. Melinda, who works 40 hours/week at a local ice cream shop during the summer

• 1. Marcus, who is on salary as a sales representative at a shoe store, working full-time

• 1. Serena, who is a freelance wedding photographer