Taxes - Unit Test

1. When do you start paying income taxes?

• When you turn 18
• When you get a full-time job (part-time does not count)
• When you make more than the minimum income requirement
• When you are notified by the IRS that you are required to pay federal income taxes

2. Why is it important to be extremely careful when completing your 1040 form?

• Making a mistake will disqualify you from receiving future refunds
• The 1040 form determines whether you owe additional taxes or are entitled to receive a refund from the government
• Completing the 1040 incorrectly will mean the wrong amount of taxes will be withheld from your paychecks going forward
• Mistakes on your 1040 form make you ineligible for employment during the next year

3. Which of the following paycheck withholdings puts money into a retirement investment fund that you will manage?

• Social Security
• Medicare
• 401(k) contribution
• Federal income taxes

4. When determining whether you NEED to file a federal tax return, each of these questions matters EXCEPT…

• How much income did you earn this year?
• What type of income did you earn this year?
• What state do you live in?
• Are you claimed as a dependent on anyone else's tax return?

5. Elaine just accepted a new job and is working with the company’s HR department to fill out paperwork. Which of the following steps is she responsible for?

• Determine how much tax to withhold from her paychecks based on W-4 information
• Complete a W-4 form
• Send withholding amounts to the federal government
• Complete a W-2 form

6. What is the name of the tax form that requires you to provide identification and proves you are eligible to work in the U.S.?

• I-9
• 1099
• 1040
• W-4

7. Which of the following statements about this W-2 form is true?

• Avia Consulting will use this W-2 to file their 1040 form
• James earned about $117,000 over the year based on the total of her Wages, Social Security wages, and Medicare wages
• James paid state income taxes of $1,189.90
• James works in the same city that Avia Consulting is based in

8. When you complete your 1040 form, if you overpaid your taxes and the government owes you money, that is called a __________.

• withholding
• direct deposit
• deduction
• refund

9. Question #1 of 3: What was the net (or take-home) pay for this employee for this pay period?

• $335.10
• $400.00
• $2,680.80
• $3,200

10. Question #2 of 3: How much did this person pay towards Medicare in this pay period only?

• $5.80
• $24.80
• $44.50
• $52.20