Calculating Federal Taxes
James is single and has a gross income of $59,000. What is his taxable income?
$46,600
The highest tax rate that applies to a portion of your income
_____ Tax Rate
Marginal Tax Rate
Abby is 15 years old, a sophomore in high school, and lives with her parents. She had $200 in unearned income and earned $1,200 from her part-time job.
Can this person be claimed as a dependent? Is this person legally required to file a tax return? Why or why not? If no, should they file a tax return?
Can this person be claimed as a dependent?
Yes
Is this person legally required to file a tax return? Why or why not?
No, because:
Her unearned income was less than $1,100
Her earned income was less than $12,400
Her gross income ($1,400) was less than her earned income + $350 ($1550)
If no, should they file a tax return? Explain your reasoning.
Yes, because she may qualify to get a refund on income taxes that were withheld from her paychecks from her part-time job.
The amount of money you take home after taxes and other expenses are taken out
Net Pay
I am completed in April, anyone can use me, beware there is a LOT to fill out
1040
Trenton is married to Brielle and has a gross income of $75,000. What is his taxable income?
$50,200
The actual percentage you pay on your taxes
_____ Tax Rate
Effective Tax Rate
Brian is 15 years old, a sophomore in high school, and lives with his parents. He has a photography side gig and his net earnings were $320. Brian is not required to file quarterly estimated tax.
Can this person be claimed as a dependent? Is this person legally required to file a tax return? Why or why not? If no, should they file a tax return?
Can this person be claimed as a dependent?
Yes
Is this person legally required to file a tax return? Why or why not?
No. His net earnings were less than $400 (self-employed).
If no, should they file a tax return? Explain your reasoning.
No. Because Brian is not required to file quarterly estimated tax, no income taxes were paid. Therefore, he does not have a refund to file a return for.
The amount of money you earn before taxes and other expenses are taken out
Gross Pay
Received in January, there is one of me for every job I work, you can tell how much you earned and how much you paid taxes by reading me
W-2
Zach is single and made $22,000 last year. What is his Federal Income Tax?
$960
A cost, such as health insurance, paid in full or part by an employer
Benefit
Yanely is 18 years old, is a high school senior, and lives with her parents. She earned $6,300 from her part-time job. She claimed EXEMPT on her W-4 on her first day of work.
Can this person be claimed as a dependent? Is this person legally required to file a tax return? Why or why not? If no, should they file a tax return?
Can this person be claimed as a dependent?
Yes
Is this person legally required to file a tax return? Why or why not?
No, because her earned income was less than $12,400.
If no, should they file a tax return? Explain your reasoning.
No. Because she claimed EXEMPT on her W-4 form (meaning she expected to make less than $12,400), no income taxes were withheld from her paycheck. Therefore, she does not have a refund to file a return for.
Wage, or the amount of money you earn per unit of time, such as an hour or week
Rate
I am received whenever you start a job, you lost information about yourself and your family on me, I determine how much money gets taken out of paycheck
W-4
Timothy is single and has a gross income of $42,000. What is his Federal Income Tax?
$3,354.50
Gross Income before tax is calculated
Pretax
Tori is 20 years old, a junior in college, and lives with her parents. She has a graphic design side gig and her net earnings were $2,150.
Can this person be claimed as a dependent? Is this person legally required to file a tax return? Why or why not? If no, should they file a tax return?
Can this person be claimed as a dependent?
Yes
Is this person legally required to file a tax return? Why or why not?
Yes. Her net earnings were more than $400 (self-employed).
If no, should they file a tax return? Explain your reasoning.
Not applicable.
Money taken from your paycheck to cover things like taxes and health insurance
Deduction
I am received in January, you get me if you are not an employee but we're paid in company, you probably didn't get taxes withheld if you got me so you may have a big tax bill coming up
1099
$11,234
The portion of an individual's income used to calculate how much tax they owe the government in a given tax year. It is calculated by taking their gross income minus the standard deduction.
Taxable Income
Ren is 21 years old and is a college senior. He lives at home with his parents and commutes to school. He earned $12,670 from his part-time job.
Can this person be claimed as a dependent? Is this person legally required to file a tax return? Why or why not? If no, should they file a tax return?
Can this person be claimed as a dependent?
Yes
Is this person legally required to file a tax return? Why or why not?
Yes, because his earned income was more than $12,400.
If no, should they file a tax return? Explain your reasoning.
Not applicable.
Set amount deducted from gross pay for a specific purpose
Allowance
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
I-9