Forms
Purpose of a W-4?
it tells the employer the employee's filing status, multiple jobs adjustments, amount of credits, income, deductions.
Define Standard deductions:
Is a portion of income not subject to tax that can be used to reduce your tax bill.
Define Wages:
A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.
40 hours.
When do you fill out a W-4?
You fill out a form each year and when your personal or financial situation changes.
Define Itemized deductions and why the government created Itemized deduction:
Extra: Give 4 examples of Itemized deduction.
Itemized Deductions is expenses subtracted to reduce taxable income and was created make it possible to pay less taxes.
Examples: Gambling, Charitable contributions, State local income, Investment
Define Inheritance:
What is the average pay for overtime hours?
Regular pay times 1.5
What does a I-9 form do?
Shows workers ability to work in the U.S.
What are the 2 mandatory payroll deductions? (FICA)
Social Security tax and Medicare tax.
Define Investment Income:
The income you get from an investment.
Ex: interest you get from a bank or dividends you get from a stock you own.
Name the 3 different tax filling statuses:
What the W-2 report and what is the time frame of income does it cover?
Taxable income.
Starting January 1 -- December 31.
What percentage is taken out of your paycheck for each of the 2 FICA deductions?
15.3%
7.65% is take out of each paycheck.
Define Benefits and Gifts:
Benefits: any tax law that provides you with an opportunity to reduce your tax bill when you satisfy certain eligibility requirements.
Gifts: a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return.
List 2 documents from List A:
List 3 documents from List B:
List A: U.S. Passport, Green Card
List B: Drivers Licence, School ID, Voters Registration Card
What is the 1040 tax filling form designed for?
It is used by single or joined fillers with no dependents or itemized deductions.
What are the 4 steps in order of making financial decisions?
1: Establishing goals
2: Evaluate current financial position
3: Find ways to accomplish goal
4: Pick your goal and reevaluate
Define Commissions:
A type of supplemental pay.
The equation to calculation gross pay is:
The equation to calculation net pay is:
(Regular Hours x Regular Pay)+(Overtime Hour x Overtime pay) = Gross Pay
Gross pay - Deductions = Net Pay