Lesson 1: Taxes and Your Paystub
Lesson 2: The Tax Cycle and Job Paperwork
Lesson 3: Teens and Taxes
Lesson 4: How to File Your Taxes
Vocabulary
100
Mandatory government spending includes which of the following?
- Infrastructure and science
- Healthcare and military
- Education and agriculture
- Social Security and Medicare
100
If your only income is salary paid by your employer, which of these statements about filing your taxes is true?
- You need to file your tax return by the end of the calendar year (typically December 31st)
- If your employer takes out federal income taxes through payroll withholdings, you do not need to file a tax return
- You must file your tax return by the deadline (typically April 15th of the following year) or request an extension by that date
- You do not need to pay any income taxes until April 15th, so you should ask your company to wait until after that date to withhold any money
100
When do you start paying income taxes?
When you make more than the minimum income requirement
100
Why is it important to be extremely careful when completing your 1040 form?
The 1040 form determines whether you owe additional taxes or are entitled to receive a refund from the government
100
The standard Internal Revenue Service (IRS) form that individuals can use to file their annual income tax returns
What is a 1040
200
What does the term "withholding" mean in reference to your paycheck?
Give example.
How much is being taken out of your paycheck for things like taxes, employer sponsored health insurance, and retirement
200
You are starting your first job and you are asked to complete some paperwork on your first day. Which form will determine how much money is withheld from your paycheck for taxes?
W-4
200
Jessica is 16 years old and earned $1,100 through her photography side gig. Her parents can claim her as a dependent on their tax return. All of the following statements are true EXCEPT…
- Jessica is required to file an income tax return
- Jessica should expect to receive a W-2 in January
- Jessica is required to pay a 15.3% self-employment tax
- Jessica can file her own tax return even though her parents are claiming her as a dependent
200
When you complete your 1040 form, if you overpaid your taxes and the government owes you money, that is called a __________.
Refund
200
An inspection of a filer's tax return by the IRS
What is an Audit
300
Which of the following paycheck withholdings puts money into a retirement investment fund that you will manage?
- Social Security
- Medicare
- 401(k) contribution
- Federal income taxes
300
If a taxpayer fills out their W-4 in a way that does not withhold enough money to cover their tax obligation, what is the most likely outcome after they file their taxes?
They will owe a payment to the IRS
300
Which of the following describes what a "dependent" is for tax purposes?
- A child or adult that you support financially
- Someone who is temporarily disabled
- An adult who financially supports you
- Someone who is a full-time student under the age of 30
300
Which of the following statements about this W-2 form is true?
- Avia Consulting will use this W-2 to file their 1040 form
- 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
- James works in the same city that Avia Consulting is based in
300
Someone you financially support who can be "claimed" on a tax return to reduce your taxable income and lower your taxes
What is a dependent
400
Juanita has a part-time job that pays $12/hour and works about 50 hours every month. Her withholdings are Social Security (6.2%), Medicare (1.45%) and federal income tax (10%). What is her approximate net pay?
$500
400
Which of the following statements about the W-2 form is TRUE?
- A W-2 lists all the money you earned in cash over the last year
- The total wages you earned from ALL jobs you worked in the previous year appear on ONE W-2 form
- You need a separate W-2 form from EACH of your employers in order to file your taxes
- The W-2 includes information about the interest you earned from your investments
400
Akshay worked at a cafe while he was a college senior in Boston, Massachusetts. After graduating in June, he moved back to his home in California and started a full-time job in September. Which of the following statements is true?
- Akshay will need to file only a federal tax return
- Akshay will need to file a federal tax return and a state tax return for Massachusetts
- Akshay will need to file a federal tax return and a state tax return for both Massachusetts and California *
- Akshay will need to file a federal tax return this year and file state returns the following year
400
Your friend Laila is talking to you about the benefits of tax filing websites. Which of the following is true?
- Filing your taxes using a website is always free of charge
- You are guaranteed a higher refund than if you were to use a paper form or hire a professional
- If you owe money to the IRS, you receive a discount if you e-file use a tax filing website
- You can avoid the costs of having to pay a professional, though you may have to pay for e-filing online
400
The percentage at which taxes are paid on each dollar of income
What is a tax rate
500
Briefly explain the difference between discretionary and mandatory government spending.
- Mandatory spending is used to fund programs like Social Security and Medicare. This money comes from a tax-funded trust fund and is a fixed amount that can’t be spent elsewhere.
- Discretionary spending can fund a number of different categories (like education and national defense) that is also funded through federal income taxes but the amount allocated to those categories can change from year to year.
500
What is the deadline to file your tax return, and what can you do if you know you will miss that deadline?
The deadline is April 15th of the following year (ex: If you are filing 2023 taxes, you must submit them by April 15, 2024 unless otherwise specified). If you know you will miss that deadline, you can apply for an extension to file your taxes by October 15 of the following year for which you’re filing taxes.
500
All of the following people would be required to file a tax return EXCEPT…
- Janet, who earned $28,200 but was paid entirely in cash
- Max, whose total income from three separate part-time jobs was $9,500
- Isaiah, who owns his own business and generated an income of $7,000
- Dani, who is a cafe barista and earned $14,000 in wages and $250 in tips
500
Give two reasons why someone would go to a tax professional (rather than using tax filing software or using the paper forms) to file their tax return.
- Their filing status may have changed (e.g. From married to divorced, single to married, etc)
- They may not be comfortable doing their taxes on their own
- They may not have the time to do their own taxes
- They have a lot of questions about how to do their taxes and need to refer to a professional
- They might have had a significant life event that impacts their taxes (buying a house, a large inheritance, etc.)
500
The portion of an employee's wages that is not included in their paycheck because it goes directly to federal, state and local taxes
What is withholding