Understanding Pay Stubs
What is the name of your pay before taxes and deductions are subtracted?
Gross pay
I arrive in the mail or electronically in January, there is one of me for every job you work as an employee, and I tell you how much you earned and how much you already paid in taxes.
W-2
What category of benefits does the federal government spend the most of taxpayers money on?
Health
Is Greg legally required to file a tax return if he can be claimed as a dependent and earned $16,550.
Yes
True or False - Net pay is found on the W-2
False
(Show a picture of a paystub)
How frequently does John receive a pay check?
Weekly
My filing deadline is April 15th, most people who earn income should complete me, and there is a LOT to fill out (you should have professional do it for you).
1040
What category of benefits does the federal government spend the least amount of taxpayers money on?
Education and social services
Can a 20 year old college student with a paid internship who pays for all of their own expenses be claimed as a dependent?
No
True or False - Your income may fall into more than one tax bracket, so more than one tax rate can apply (fill up the first pocket and then move to the next pocket)
True
How much was the take-home pay for this employee for the pay period?
$335.10
You get me if you earned other types of income, or if you are not an employee but were paid by a company.
1099 (There are usually letters listed after my #)
Which would be a higher number, taxable income or gross income?
Gross income
A ________ lowers a person's tax liability by lowering their taxable income.
Deduction
When do you start paying income taxes?
When you make more than the minimum income requirement.
How much did this person pay towards Medicare YTD (Year-to-date)?
$46.40
I am very important, I determine how much money gets taken out of each paycheck. If you don't think you will make enough money to fill out a tax return, you can write EXEMPT on me.
W-4
In what month will you receive your W-2 or 1099 from any earned income of the prior year?
January
If you don't itemize your deductions on your 1040 tax return, you take the _________ deduction which is the amount of money the government doesn't make you pay tax on.
Standard
You can legally reduce your taxable income by maximizing contributions to a 401(k) and making charitable donations, this is called?
Tax avoidance
This is the term that means how much is being taken out of your paycheck for things like taxes, employer sponsored health insurance, and retirement.
Withholding
The I-9 is completed at the start of a new job and it proves that you are eligible to work in the U.S. What type of identification must you provide when submitting this form?
A picture Identification
Medicare and Social Security are mandatory spending categories funded by which type of taxes that are withheld from your paycheck?
FICA
If you underreport your income to reduce the total amount of taxes owed you just committed tax _____.
Evasion
The U.S. uses a __________ tax system, it is when high-income taxpayers pay a larger fraction of their income than taxpayers with a lower income. The tax rate increases as the income grows.
Progressive