Taxes 101
What do taxes do?
Taxes raise money for government services. They help pay for services that markets may not be able to support on their own.
What was the New Deal?
A series of programs and projects instituted during the Great Depression by FDR that aimed to restore prosperity to Americans and prevent future depressions.
Who pays FICA?
Employees and Employers
What is a W4?
A form that captures a person's marital status and withholding elections to tell the employer how much to withhold in income taxes.
What are direct taxes?
Taxes that are paid by a person or organization to the government body that imposed the taxes.
From the New Deal came FLSA. What does FLSA stand for?
Fair
Labor
Standards
Act
The New Deal also saw the institution of FICA. What does FICA stand for?
Federal
Insurance
Contribution
Act
What major factors on a W4 influence how much tax your employer withholds in income taxes?
Gross wages earned
Filing Status: Single or Married
Total withholding allowance elected
What are Indirect Taxes?
Taxes that are collected by a store or sellar or producer of good, but are paid by consumers.
FLSA established many things that we still practice today. What is one example of something that came out of FLSA?
40 Hour Work Week
Minimum Wage
Overtime Pay
Full-time and Part-time Employee status
What rates are employees and employers assessed on Social Security?
Employee: 6.2%
Employer: 6.2%
Total 12.4%
Please define the following:
Gross Pay
Net Pay
Gross Pay: The amount of money you make before taxes and deductions are taken out
Net Pay: The amount of money you take home after taxes and deduction are taken out
What is an example of Indirect Taxes?
Value-added taxes
Sales Taxes
What was the purpose of the Social Security Act?
An act created to pay for unemployment insurance, aid to the disabled and poor, and to give retirement benefits.
What rates are employees and employers assessed for Medicare?
Employee: 1.45%
Employer: 1.45%
Total: 3.9%
What is a W2 and what does it capture?
A W2 is a form given to employees so they may file their personal income taxes.
It captures what the employee made versus how much they have paid in taxes throughout the year.
What is an example of Direct Taxes?
Property Taxes
Income Taxes
Which President instituted the New Deal?
What is the taxable wage base for Social Security for 2019?
$132,900
What is the last day Employers MUST file an employee's W2?
January 31