Intro
need
something you need to survive
Gross income
Net income
Gross income: The amount of earnings before payroll deductions
Net income: Or take-home pay is your gross income minus payroll deductions
What age can u take out of your 401(k) at
59 1/2 years old
Types of Mandatory Tax Deductions
Federal income taxes
State income taxes
Social security taxes
Medicare taxes
Local income taxes
I-9 Form
proves you are eligible to work in the United States.
want
something you want to have in life
Wages
Employees who work for wages are paid for each worked hour
The minimum wage is the lowest pay rate allowed by law for each hour worked
The federal minimum wage is $7.25 per hour but in many states, it's higher
What are benefits that the Employee can receive by working for a company
Pensions, 401(k), Rotha IRA, Healthcare Plan
Types of Voluntary Tax Deductions
Insurance
Savings and retirement plan contributions
Donations
W-4 Form and dependents
Determines the percentage of gross pay which will be withheld for taxes. Use this form to claim dependents
Dependent - a person who relies on the taxpayer for financial support.
Short term
6 months to 1 year
Overtime pay
The standard work week is 40 hours
Employees paid by the hour that work more than 40 hours in a week are entitled to overtime pay
Overtime pay is at least 1.5 times the regular pay
If you switch jobs what should u do with your 401(k)
If you switch jobs, you should roll over your 401(k) into a Roth IRA or the new company's retirement plan.
Excise taxes
are taxes required on specific goods or services like fuel, tobacco, and alcohol.
W-2 form
filled out by your employer. Shows your taxable income.
Medium and Long Term goal
Medium: 1 to 5 years
Long: 5+ years
Salary
Pay expressed annually or monthly
Salaried workers usually do not keep time cards or count hours worked
No overtime pay
401(k)
Employees contribute pre-tax dollars into a retirement fund to be invested in financial markets. Taxes aren’t paid until the money is withdrawn from the account at 59 ½ years old.
Employers may match a specified percentage of the contribution.
IRS
is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory tax law
1040 form
a form that individual taxpayers use to file their annual income tax returns. (Use the w-2 form to fill this out)
S.M.R.T stand for
Specific
Measurable
Realistic
Time bound
Other forms of pay
Tips: A tip is money or a gift given to a person for performing a service
Commission: a set fee or percentage of a sale paid to a salesperson instead of or in addition to a salary or wage.
what is Roth IRA (individual retirement plan)
a person set aside after-tax income up to a specified amount each year. Both earnings on the account and withdrawals after age 59 ½ are tax-free.
Tax avoidence vs Tax evasion
Tax avoidance
Reducing your taxes by claiming legitimate adjustments, tax deductions, and credits.
Tax evasion
Failing to declare all income or falsifying deductions, adjustments, or credits
Can result in IRS adutit and Heavy penalties
What forms must you complete to receive a Paycheck from an employee.
Complete a W-4 Form
Complete an I-9 form