Taxes

Name the Form

100

A tax form used in the U.S. to report wages paid to employees and the taxes withheld from them. Employers must complete a this form for each employee to whom they pay a salary, wage, or other compensation as part of the employment relationship.

W-2

200

You are starting your first job and you are asked to complete some paperwork on your first day. Which form will determine how much money is withheld from your paycheck for taxes?

W-4

300

What is the name of the tax form that requires you to provide identification and proves you are eligible to work in the U.S.?

I-9

400

This form used for personal federal income tax returns filed by U.S. residents. The form calculates the total taxable income of the taxpayer and determines how much is to be paid or refunded by the government.

1040

500

This form documents different types of payments made by an individual or a business that typically isn't your employer.

1099 (1099-MISC)

Scenarios

100

Elaine just accepted a new job and is working with the company’s HR department to fill out paperwork. Which of the following steps is she responsible for?

1. Determine how much tax to withhold from her paychecks based on W-4 information
2. Complete a W-4 form
3. Send withholding amounts to the federal government
4. Complete a W-2 form

2. Complete a W-4 form

200

Jessica is 16 years old and earned $1,100 through her photography side gig. Her parents can claim her as a dependent on their tax return. All of the following statements are true EXCEPT… 

1. Jessica is required to file an income tax return
2. Jessica should expect to receive a W-2 in January
3. Jessica is required to pay a 15.3% self-employment tax
4. Jessica can file her own tax return even though her parents are claiming her as a dependent

2. Jessica should expect to receive a W-2 in January

300

Robert fills out their W-4 in a way that does not withhold enough money to cover his tax obligation, what is the most likely outcome after he files his taxes?

1. He will receive a refund
2. He will owe a payment to the IRS
3. He will be audited
4. He will be charged with tax evasion

2. He will owe a payment to the IRS

400

Alan worked at a cafe while he was a college senior in Boston, Massachusetts. After graduating in June, he moved back to his home in California and started a full-time job in September. Which of the following statements is true?

1. Alan will need to file only a federal tax return
2. Alan will need to file a federal tax return and a state tax return for Massachusetts
3. Alan will need to file a federal tax return and a state tax return for both Massachusetts and California
4. Alan will need to file a federal tax return this year and file state returns the following year

3. Alan will need to file a federal tax return and a state tax return for both Massachusetts and California

500

Marquis is starting a fast food job during his senior year of high school. He lives with his parents and they will claim him as a dependent on their taxes this year. He earns $2000. Based on how he completed his W-4, his employer withheld $200 in federal income taxes from his paychecks. What will happen if Marquis doesn't file taxes in April?

1. The IRS will refund his $200 directly to him
2. The IRS will refund his $200 to his parents
3. The IRS will fine Marquis $75 or more for not filing taxes
4. Nothing will happen, but Marquis will miss out on his potential refund

4. Nothing will happen, but Marquis will miss out on his potential refund

Random Tax Questions

100

Mandatory government spending includes which of the following?

1. Infrastructure and science
2. Social Security and Medicare
3. Healthcare and military
4. Education and agriculture

2. Social Security and Medicare

200

When does someone start paying income taxes? (not a date)

When they make more than the minimum income requirement

300

What is the deadline for employers to mail W-2s to their employees (either by paper or electronically) (Date)

January 31

400

What is the state income tax rate in WA?

There are no income taxes at all

500

What 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

January 24

Define

100

Describe what a "dependent" is for tax purposes.

A child or adult that you support financially

200

What is gross pay?

Gross pay is before taxes and deductions are subtracted

300

When you complete your 1040 form, if you overpaid your taxes and the government owes you money, that is called a __________.

Refund

400

What does it mean to be tax exempt?

Being tax-exempt means that some or all of a transaction, entity or person's income or business is free from federal, state or local tax.

500

What does the term "withholding" mean in reference to your paycheck?

How much is being taken out of your paycheck for things like taxes, employer sponsored health insurance, and retirement

Explain

100

Your friend Alice is a full-time college student, earned $4,000 working at the campus bookstore over two semesters last calendar year, and also got a part-time job as a cashier in February, earning $9,500. Alice knows that you have been learning about taxes in your personal finance lessons and asks you, “Do I need to file taxes this year?" Does she? Explain why or why not.

Yes, Alice will need to file taxes this year because she meets the minimum income requirement to file ($12,950 for filing year 2022)

200

Give two reasons why someone would go to a tax professional (rather than using tax filing software or using the paper forms) to file their tax return.

• Their filing status may have changed (e.g. From married to divorced, single to married, etc)
• They may not be comfortable doing their taxes on their own
• They may not have the time to do their own taxes
• They have a lot of questions about how to do their taxes and need to refer to a professional
• They might have had a significant life event that impacts their taxes (buying a house, a large inheritance, etc.)

300

Jill is 16 years old and worked at her local grocery store over the summer earning $5,600. Is Jill legally required to file a tax return? If not, should she file anyway? Explain.

No, Jill is not legally required to file a tax return because she did not meet the minimum income requirement to file. However, she should file a tax return because she is likely to get a refund.

400

Briefly explain the difference between discretionary and mandatory government spending.

• Mandatory spending is used to fund programs like Social Security and Medicare. This money comes from a tax-funded trust fund and is a fixed amount that can’t be spent elsewhere.
• Discretionary spending can fund a number of different categories (like education and national defense) that is also funded through federal income taxes but the amount allocated to those categories can change from year to year.

500

What is the deadline to file your tax return, and what can you do if you know you will miss that deadline?

The deadline is April 15th of the following year (ex: If you are filing 2022 taxes, you must submit them by April 18, 2023 unless otherwise specified). If you know you will miss that deadline, you can apply for an extension to file your taxes by October 15 of the following year for which you’re filing taxes.

NOTE: For some tax years, the deadline is extended due to holidays, etc.