Vocab.
A tax term meaning gross income less adjustments
Adjusted Gross Income
Find the withholding tax for a person that earns $390.00 a week, is single, and claims 1 withholding allowance.
$34
Jill is single and had an adjusted gross income last year of $16,457. Jill itemized deductions were $5,452. She claims one exemption of $3,500. What was Jill's estimated taxable income?
$7,500
Sue pays a city income tax of 3.7% on her taxable income. Her taxable income last year was $58,390. What city income tax amount did she pay?
$2,160.43
Mark had the following job expenses for last year: union dues, $529; licenses, $178; commuting costs, $2,709. Her total job benefits for the same period were $46,192. Find her net job benefits.
$42,776
A section 125 plan that allows employees to put pre-tax wages into an account that is used to pay for qualified expenses, such as health or life insurance premiums, child care, or health care expenses.
Cafeteria Plan
Find the Social Security tax using 6.2% for a person who earns $475.00 a week.
$29.45
Use the tables on pg. 49 to find the tax. Beth and Steve are married and file a joint tax return. Their taxable income is $23, 378. What is their tax?
$2,724
In addition to federal and state income taxes, Bob also has to pay a city income tax. The city income tax rate is 2.5% of his taxable income. If his taxable income is $2,345, what is his city income tax?
$58.63
John earned gross pay of $26,888 last year. He estimates his yearly benefits to be: paid pension, $1,828; health and life insurance, $1,654; paid vacations and holidays, $2,582; free parking, $237. What were John's total estimated benefits for last year?
$6,301
Subtractions from gross pay.
Deductions
Josh is paid a monthly salary of $8,700. Find the exact Social Security taxes he paid for the month of March.
$539.40
How much tax does a head of household with taxable income of $23,798 owe?
$3,006
Use the graduated tax table on pg. 55 to find the state income tax for a person who has a taxable income last year of $25,890.
$814.50
Fred earns a gross wage of $395.22. Out of those wages, $44 in federal withholding, $30.23 in FICA, and $22.80 in health insurance premiums are deducted. Find Fred's net wages.
$298.19
The amount of income that is free from tax.
Exemption
Josh is paid a monthly salary of $8,700. What Medicare taxes did he pay for the year?
$1,513.80
Jeff's tax return for last year shows a total tax of $8,278. Jeff's employer withheld $8,450 from wages during the year. What refund should Jeff receive?
$172
Bill has a taxable income of $26,600. He pays a city income tax of 2% on taxable income in addition to state and federal taxes. What is his state tax?
$532
Fred earns a gross wage of $395.22. Out of those wages, $44 in federal withholding, $30.23 in FICA, and $22.80 in health insurance premiums are deducted. Find the percentage of gross pay that Fred takes home to the nearest percent.
75%
A tax that stays the same for every person regardless of the amount of income they earn in a year.
Flat Tax
Rachel earns an annual salary of $126,00. How much Social Security taxes will be deducted from her salary in May?
$651
Last summer, Troy earned $2,855. His employer withheld $240 of his wages for income taxes. What is the amount of Troy's tax refund?
$240
Ellen pays city taxes of 2.5% on taxable income, in addition to state income tax. Her taxable income last year was $42,870. What was her total state and city income tax?
$2,872.65
Kara earns $4,000 per month. The following amounts are deducted from her gross wages: $584 federal income taxes, $248 Social Security, $58 Medicare, $120 state income taxes, and $120 health insurance. To the nearest percent, what percent of her gross pay does Kara take home?
72%