Tax Basics
Tax Forms
Words I Should Know
100
______ is a tax on what you earn from work and gets larger the more you make.
Income tax
100
You complete this type of form to file your federal income taxes.
1040
100
DOUBLE POINTS
A dependent is __________.
For this person to count as a dependent, you need to pay at least ____% of their expenses.
A child or family member you care for (at least 50% of expenses).
200
The largest tax withholding on your pay stub will almost always be ______________.
Federal income tax
200
Complete a ___ form to prove you are legally allowed to work in the United States.
I-9
200
DOUBLE POINTS
Your __________ is the percentage of your income that you pay in income tax.
It is determined by your ___________.
1) Tax rate
2) Tax bracket
300
DOUBLE POINTS
The two programs funded by FICA are ______ and _____.
Social Security
Medicare
300
DOUBLE POINTS
Two important pieces of information you will find on your W2 Form are _________ and ________.
- Your yearly income
- How much you have already withheld in federal income tax
300
DOUBLE POINTS
A tax deduction is ____________.
An example of a tax deduction is ____________.
1) A tax deduction is something that reduces how much income tax you owe.
2) Dependents, the Standard Deduction, etc.
400
Your paycheck shows you taxes that have been WITHHELD, which means ______________.
...you have had part of your paycheck set aside to pay the taxes you owe.
400
You complete a W-4 form to ___________.
Tell your employer how much money to withhold from your paycheck for federal income tax
400
A tax return is _________________.
A summary of your taxes owed and taxes paid in a tax year.
500
DOUBLE TIME
Katie earned $60,000 this year (and reported ALL of it). Using the chart on your study guide, provide an estimate of her EFFECTIVE TAX RATE.
A) 0 - 5%
B) 5 -10%
C) 10 - 15%
D) 15% or higher
C) 10 - 15%
500
You report "other income sources" on a ______ form.
An example of an "other income source" that you might report on this form is __________.
1) 1099
2) rental income, self-employed income, interest from a savings account, investment gains, income from resale of a product, large gifts
500
Your taxable income is calculated by ____________.
It is used for ____________.
Your taxable income is your gross income minus tax deductions.
It is used to determine how much income tax you owe.