1st Quarter Assessment: Financial Math

1. What does the term "withholding" mean in reference to your paycheck? 

• The amount of your paycheck that you are NOT being taxed on.

• 1. How much you are going to owe the government when you file your annual tax return.

• How much you earn and includes salary, bonus and commissions.

• 1. How much is being taken out of your paycheck for things like taxes, employer sponsored health insurance, and retirement.

When do you start paying income taxes?

• 1. When you turn 18.

• 1. When you get a full-time job (part-time does not count).

• 1. When you make more than the minimum income requirement.

• 1. When you are notified by the IRS that you are required to pay federal income taxes.

Which statement correctly describes taxable income?

• 1. Taxable income is the sum of all income a person earns.

• Taxable income is always equal to or greater than a person's gross income.

• 1. Taxable income is gross income minus deductions and exemptions.

• Taxable income includes all personal expenses and investments.

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

(Click on the image.)

• 1. Avia Consulting will use this W-2 to file their 1040 form.

• 1. 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.

• 1. James works in the same city that Avia Consulting is based in.

1. What was the net (or take-home) pay for this employee for this pay period?

2. (Click on the image to make a selection.)

How much did this person pay towards Medicare in this pay period only?

(Click on the image to make a selection.)

1. How frequently is this employee paid?

2. (Click on image.)

• Daily

• Every other week

• Weekly

• Monthly

1. What is the main difference between tax deductions and tax credits?

• 1. Tax deductions are available for all taxpayers, while tax credits are only for specific groups.

• Tax deductions lower taxable income, while tax credits reduce the amount of tax owed directly.

• Tax deductions are for personal expenses, whereas tax credits can only be used for business expenses.

• 1. Tax deductions and tax credits are the same; both reduce the amount of tax owed dollar for dollar.

Your friend pays you back with a check, and you lose it before cashing it in.

What should you do first?

• 1. Write a new check for yourself.

• 1. There’s nothing you can do. The money is lost.

• 1. Contact your friend to issue a stop payment.

• 1. Contact your bank to issue a stop payment.

20. All of the following statements about bank accounts are true EXCEPT…

• If the bank is FDIC-insured, your money, up to the FDIC limit, is safe even if the bank fails.

• 1. Many banks pay interest on the money you deposit into your savings account.

• 1. Historically, savings accounts earn higher returns than investments in the stock market.

• 1. Money in a checking account is usually easy to access via ATM, debit card or check.