TAXES 1
What government agency collects federal income taxes in the U.S.?
IRS (Internal Revenue Service)
Multiple Choice: Which of these is NOT taxable income?
A) Wages from a job
B) Lottery winnings
C) Birthday money from Grandma
C) Birthday money from Grandma
Which of these is usually considered a fixed monthly bill?
A) Rent
B) Groceries
C) Movie tickets
A – Rent
What is the main difference between a checking account and a savings account?
Checking = for daily spending; Savings = for storing money and earning interest
True or False: Subscriptions like Netflix or Spotify are optional bills.
TRUE - They are recurring but not required
What form do employers give you at the beginning of the year that shows your income and taxes withheld from the previous year?
W-2
True or False: College students may qualify for certain tax credits.
TRUE
True or False: You don’t have to pay utilities if you pay rent to a landlord.
False – Some landlords pay, some tenants do; always check your lease!
What do banks usually pay you for keeping money in a savings account?
Interest
Which of these is considered a variable bill (changes month to month)?
A) Electricity
B) Rent
C) Car payment
A – Your electricity and other utility bills are typically based on usage
True or False: Everyone pays the same percentage of income tax.
False — the U.S. has a progressive tax system (higher income = higher rate) Most young adults fall into 12% or 22%
What’s it called when you don’t report some of your income to avoid paying taxes?
Tax evasion (Illegal....don't do it. Prison is bad)
Which of these bills can affect your credit score if unpaid?
A) Electricity
B) Credit card
C) Both
C – Unpaid credit cards or some utilities sent to collections can affect credit
If a bank charges you for spending more than your balance, what is this fee called?
Overdraft Fee
True or False: Ignoring small bills doesn’t matter if you can pay larger bills first.
False – ignoring any bills can lead to late fees, service interruptions, or credit problems
What is the deadline to file your taxes each year (most years)?
April 15
What tax form must you give someone if they are not your employer and are paying you $600 or more in a calendar year (aka “contract work”)?
W-9
You get a late fee for missing a bill’s due date. Which of these is the best way to avoid it?
A) Ignore it and pay when you remember
B) Set up calendar reminders or autopay
C) Wait until the end of the year to pay
B – reminders or autopay prevent late fees
True of False: Having overdraft protection on your checking account will save you money.
FALSE - It allows you to overdraft instead of having a declined expense but then the bank charges you overdraft fees.
If you live in an apartment, which utility might be included in your rent?
A) Water
B) Electricity
C) Trash
D) All or None of the above
D – Often water or other utilities are sometimes included, but it varies. Alway check!
If you are self-employed, which additional tax do you pay that covers Social Security and Medicare?
Self-employment tax
What tax form must someone GIVE YOU if you are not their employee and they are paying you $600 or more in a calendar year?
1099
Which bill is usually considered a necessity for living independently?
A) Internet
B) Rent or mortgage
C) Gym membership
B – Housing is essential
Which of these is NOT usually a feature of a checking account?
A) Debit card
B) Check-writing
C) Interest that grows your money quickly
C) Interest that grows your money quickly
What is the difference between a fixed expense and a variable expense on your monthly bills?
A FIXED expense stays the same each month (like rent or a car payment).
A VARIABLE expense changes from month to month (like electricity, water, or groceries).