1.1
Describe the difference between gross and net pay.
Gross pay is the "sticker price". Net pay is the money you actually make after deductions.
When are you legally required to file your taxes (2023 numbers) for earned income?
If you made more than $13,850
Which form do you need to refer to while filling out your taxes? (not the actual tax form)
Your W-2
When is tax day aka the deadline to submit your taxes or request an extension? (2023)
April 15th
What does the "IRS" stand for?
Internal Revenue Service
In general are you deducted more for social security or medicare on each pay check?
Social security.
SS=6.2%
Medicare=1.45%
Nathan is 23 years old and earned $12,500 at his paid internship last year. Is he legally required to file taxes? Should he?
He is not required to, but he should because he will likely get a refund.
Which form could you claim "EXEMPT" on for income tax?
W-4
Your employer must send you your W-2 by ______ (date).
January 31st
Why does the standard deduction typically increase from year to year?
To account for inflation.
On a pay stub you may see "FICA". What are the two things covered in this category?
Medicare and social security
Corey is 27 years old and lives with his grandparents. He is unemployed, so his grandparents are supporting him, other than his food/grocery bills. Can Corey be claimed as a dependent?
Yes he can. He would qualify as a "qualifying relative".
When you are filling out the 1040, how is your taxable income calculated?
Your taxable income is your gross income minus the standard deduction.
Jeremy wants to get his taxes done as early as possible. What's the earliest date Jeremy could file? What issue might Jeremey run into?
He can file January 23rd. He might have trouble if he hasn't received his W-2 yet.
Income tax hasn't been around forever. When did it start?
Income tax started in 1861 during the Civil War.
Describe what social security and medicare are.
Social security= provides an income for retired workers/people over the age of 65.
Medicare= helps those 65 and older or with certain disabilities with medical care.
Explain the requirements you must meet to qualify as a dependent (qualifying child).
Your parents/guardians are supporting you and you are:
1. under 19 and younger than the taxpayer
2. under 24 and a full-time student
Which form do you need to fill out for taxes for interest income earned on bank accounts?
1099-INT
What happens if April 15th falls on a weekend or holiday?
Tax day is delayed until the next business day.
Name one of the states that does not charge income tax.
Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming