Introduction- Taxes and Paystub
Briefly describe the purpose of taxes
Taxes are the government's income, without taxes the government couldn't provide services.
Taxes are deductions from gross pay.
January 1st is the...
First day of the calendar year. Your earnings for the year begin on this date.
I am received in January
There is one of me for every job you work
You can tell how much you earned and how much you paid in taxes by reading me
W2
TRUE or FALSE: Only U.S. citizens can be claimed as a dependent for tax purposes.
False. Citizens of Canada and Mexico can be claimed as dependents for tax purposes.
Miguel has been working at his job for 3 years and already filled out a W-4 when he was first hired. This year, he just got married and is planning on filing his taxes jointly with his spouse. What should he do?
Request to fill out a new W-4 from his employer
What are Pre-Tax Deductions and Contributions?
Contributions taken out of your paycheck BEFORE taxes are calculated on your income
Whenever you start a new job ...
Complete a W-4, indicating how much in taxes you’d like withheld from each paycheck
You will complete a new W-4 for every job you hold in a year
Self-employed workers will not receive a W-4 and are responsible for making advance tax payments quarterly
Complete an I-9, indicating eligibility for employment in the United States
I am received in January
You get me if you are not an employee, but were paid by a company
You can also get me for other types of income, such as gains and losses in brokerage accounts, dividend and interest payments, and more
You probably didn’t get taxes withheld if you got me, so you may have a big tax bill coming up
1099
What is the amount of the self-employment tax (SECA)?
15.3%
What are two examples of Employer Contributions?
Health insurance and 401(k)
Medicare and Social Security are mandatory spending categories funded by which type of taxes that are withheld from your paycheck?
FICA
January 23rd is the...
First day you can submit tax returns for the previous year, although you likely will not have received necessary documents to file, such as your W-2
I am completed every April
Anyone can use me
Beware, there is a LOT to fill out
1040
How does the amount from the previous question compare to FICA taxes?
It is the equivalent of the FICA taxes taken out of a regular employee’s paycheck
Last day of the calendar year. Your yearly earnings are final after this date.
December 31st
The federal income taxes that are withheld from your paycheck are used to pay for what?
Discretionary spending
January 31st
Deadline for employers to mail W-2s to their employees (either by paper or electronically)
If you do not receive your W-2 by ____________ , contact your employer
If you worked multiple jobs in a year, you will receive multiple W-2s
The vast majority of people wait until after this date to file taxes since without a W-2 it is difficult to accurately determine your taxes owed
w4
I am received whenever you start a job
You list information about yourself and your family on me
I determine how much money gets taken out of each paycheck
When filling out a W-4 form, in what situation would a teen want to claim exemption from federal income taxes being withheld from their paycheck? What is the benefit of doing so?
They would want to claim exemption if they don’t expect to earn more than the minimum income threshold to file a tax return. This way they won’t have to file a return and wait to get a refund for any income taxes that were withheld.
If you are a dependent, under the age of 65, and single, you must file a return if:
Your earned income was more than $12,550
Your unearned income was more than $1,100
Your gross income (total of your earned and unearned income) was more than the larger of:
$1,100 or
Your earned income (up to $12,200) plus $350
What are some benefits we receive as a result of government spending?
Health and retirement benefits for seniors
National parks maintenance
Public school education
April 15th
***Last day to submit income tax forms or to request an extension***
I9
I am received whenever you start a job
You use me to prove that you are eligible to work in the U.S.
You must provide forms of identification when submitting me
The resource mentions that if the IRS owes you a refund, you won’t be penalized if you file your tax return late. Why might you want to file your tax return on time anyway?
While you have up to 3 years to file a tax return if you are owed a refund, you may want to file it on time, because:
You are delaying getting your own money back
You may forget to file if you wait too long and you’ll never get the money back
Deadline for filing income tax returns that have received extensions
October 15th