Intro
Needs vs wants
A need is something thought to be a necessity or essential items required for life
A want is something unnecessary but desired or items which increase the quality of living.
Gross income, is the amount of earnings before payroll deductions
Net income, or take home pay is your gross income minus payroll dections
Medicare
nations health care program for retired persons, flat rate 1.45%
Why do we pay taxes
Taxes provide revenue for federal, local, and state governments to fund essential services--defense, highways, police, a justice system--that benefit all citizens, who could not provide such services very effectively for themselves.
w4
determines the percentage of gross pay which will be withheld for taxes. Use this form to claim dependents
Smrt Goals
S - specific, enough detail to be understood
M - measurable, can be quantified
R - realistic, can be accomplished
T - time bound, has a reasonable time frame
Examples of types of pay
Tips, a tip is money or a gift given to a person performing a service
Commission, a set fee or percentage of of a sale Paid to a salesperson instead of or in addition to a salary or wage
Benefets
An economic benefit is any benefit that we can quantify in terms of the money that it generates.
IRS
The federal agency that collects income taxes in the United States.
I - 9
proves you are eligible to work in the united states
Lengths of goals
Short term - one year or less
Medium term - one to 5 years
Long term 5 years or more
Minimum wage
the lowest wage permitted by law or by a special agreement
401k
Employees contribute pre tax dollars into a retirement fund
Money is withdrawn at 59 years old
Employees match a specified percentage of the contribution
If you switch jobs you should roll over your 401k into a roth ira
Types of mandatory deductions
Social security (FICA) taxes are withheld from ALL employees' pay based on the published tax rates and wage base. There are only two exceptions:
W2
filled out by employer, shows your taxable income
Overtime pay rate
hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay
Roth Ira
Types of voluntary deductions
Voluntary deductions are amounts which an employee has elected to have subtracted from gross pay. Examples are group life insurance, healthcare and/or other benefit deductions
1040
Form that induvial taxpayers use to file their annual income tax returns
40 hours worked at 10$, 2 over time hours
40x10=400, 1.5x10=15, 15x2=30, 400+30=430
Pension
a regular payment made during a person's retirement from an investment fund to which that person or their employer has contributed during their working life.
Tax avoidance vs tax evasion
Failing to declare all income or falsifying deductions adjustments or credits
Can result in irs aduit, heavy penalties.