Intro
Needs vs. Wants
Needs: Something you must have
Wants: something you desire or something you would like to have or do
Gross Pay and Net Pay
Gross Pay:Take home pay before any deductions
Net Pay:Take home pay what you get after deductions
Definition of benefits
an advantage or profit gained from something. additional to salary any type of plans
Why do we pay taxes
provide revenue for federal, local, and state governments to fund essential services
Tax avoidance vs. tax evasion
Tax evasion: Failing to declare all income or falsifying deductions, adjustments, or credits
Tax evasion: IRS audit and heavy penalties
SMRT Goals
Specific - Enough detail to be understood
Measurable - Can be quantified
Realistic - Can be accomplished
Time-bound - Has a reasonable time frame
Examples of types of pay
Salary, tips, stocks, bonuses
401(k)employer match
retirement savings plan sponsored by an employer. Employees contribute pre-tax dollars into a retirement fund to be invested in financial markets.
IRS
The federal agency that collects income taxes in the United States.
W4
Determines the percentage of gross pay:(how much taxes will be taken out of your paycheck)
Length of Goals
Has a reasonable Time frame
7.50 dollars for federal, but mostly higher for other states
Roth IRA
Person to set aside after-tax income up to a specified amount each year. Both earnings on the account and withdrawals after the age of 59.5 yrs are tax-free
Types of mandatory deductions
Federal income taxes
State income taxes
Social security taxes
Medicare taxes
Local income taxes
I-9
Proves you are eligible to work in the United States
Overtime Pay Rate
1.5 times
Pension
Employer-funded plan. The employee receives regular payments in retirement
Types of voluntary Deductions
Insurance
Savings and retirement plan contributions
Donation
W-2
Filled out by your employer shows your taxable income.
Arlene works for an hourly rate of $8.50. This week
Arlene worked for 30 hours. What is Arlene’s gross
pay for this week?
8.50 x 30 = $255
excise tax
a larger amount of tax on items to prevent people on purchasing them
1040
a form that individual taxpayers use to file their annual income tax returns.