Intro
Examples of needs
water, food
Defintions of gross pay and net pay
gross pay=what employees earn before taxes, benefits, and other payroll deductions are withheld from their wages
net pay=is what employees earn after they are taxed
What are all the forms of retirement plans/accounts and how do they work?
FICA tax/social security fun=provided retirement income for retired people over the age of 67 (flat rate=6.2%)
Pension=a regular payment made during a person's retirement from an investment fund to which that person or their employer(s) have contributed during their working life
Medicare=Nations health care program for retired personas (flat rate=1.45%)
401-K retirement savings plan=(sponsored by an employer)-employers contribute pre-tax dollar into a retirement fund to be invested in financial markets. Taxes aren't paid until the money is withdrawn from the account and 59 1/2 years old. Employees may MATCH a specific percentage of the contribution
Roth IRA=(Individual Retirement Account/Plan)-When employees might be able to rollover their 401-K into a Roth IRA or the new companies retirement plan if you switch jobs
Why do we pay taxes?
We pay taxes so the government has money to pay for the military, education and other donations
What is a W4 form/what's it's purpose?
W4(required by the IRS)-Determines the percentage of gross pay which will be withheld for taxes. The use of this form is to claim dependants.
Examples of wants
Lamborghini, diamonds
Examples of pay
1)Gross Pay
2)Net Pay
What are benefits?
An advantage of profit gained from something/payment of a gift made by an employer, the state or an insurance company
Internal Revenue Service and collect taxes and administrate internal revenue code.
What is the I9 form/what's it's purpose
Proves you are eligible to work in the U.S. (ID/ documentation proves who you are to work/your work)
what does SMRT goal stand for?
Specific, Measureable, Realistic, Time.
Definition of minimum wage
The minimum amount someone can be paid per hour of service depends on the state. The minimum is $7.25 per hour but can be more.
What is a 401-K (an employer match)?
*Taxes aren't paid until the money is withdrawn from the account at 59.5 years old.
List practically all Mandatory and Voluntary Deductions:;
Mandatory deductions:
-federal income taxes
-state income taxes
-social security taxes
-medicare taxes
-local income taxes
Voluntary Tax Deductions:
-Insurance
-Savings and retirement plan contributions
-Donations
What is the W2 form/what's it's purpose?
Filled out by your employer. Shows your taxable income (Like a final receipt).
Length of all 3 types of goals
short term- requires under a year
medium term-requires 2-5 years
long term- requires 5 or more years
What is an overtime pay rate = to
1.5 times the average wage/pay rate
What is a Roth IRA (tax advantages)?
They are tax advantages (401-K can be converted to Roth IRA)
What is an excise tax?
They are taxes required on specific goods
What is the 1040 form and what's its purpose?
The form that individual taxpayers use to file their annual income tax returns.
*(How much money you get taxed the whole year, any deductions that you’ve done tell to the government on the 1040)
Give an example of a SMRT goal
I want to save up $20 dollars every 3-4 days to save up for a new iPhone within the next few months (1-3 months).
A student babysits 3 times a week each day for 2 hours and gets paid $25 per hour. How much money does the student make (not including taxes/benefits/other payroll deductions)?
$150
What is a pension?
It is a regular payment made during a person's retirement from an investment fund to which that person or their employers have contributed during their working life.
Tax avoidance v.s./and tax evasion
Tax Avoidance=reducing your taxes by claiming legitimate adjustments, tax deductions, and credits
Tax Evasion= (can result in IRS audit, heavy penalties, jail time)=/-failing to declare all income or falsifying deductions, adjustments, or credits.
What is the 1099/what's its purpose?
Used to report non-employment income to the IRS (internal revenue service). Businesses are required to issue this form to a tax payer (other than a corporation) who has received at least $600 or more in non-employment income during the tax year.