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Taxes
Study for your final over Taxes.
| Question | Answer |
|---|---|
| 1040 | The standard Internal Revenue Service (IRS) form that individuals can use to file their annual income tax returns |
| 1099 | A form that details all "non-employee" compensation, including for specific jobs like freelancers or contractors. You probably didn’t withhold taxes from my earnings, so you may have a big tax bill coming up! |
| Dependent | Someone you financially support who can be "claimed" on a tax return to reduce your taxable income and lower your taxes |
| I-9 | Form used by an employer to verify an employee's identity and to establish that the worker is eligible to accept employment in the United States |
| Standard Deduction for 2024? (What is someone required to make in order to pay federal taxes and be legally required to file a tax return) | $14,600 |
| Tax Refund | An amount that a government gives back to a taxpayer who has paid more taxes than were due |
| W-2 | A form that an employer must send to an employee by Jan. 31 which reports the employee's annual wages and taxes withheld from their paycheck |
| W-4 | A form completed by an employee to indicate his or her tax situation (exemptions, marital status, etc.) to the employer, who then withholds the corresponding amount of taxes from each paycheck |
| Withholding | The portion of an employee's wages that is not included in their paycheck because it goes directly to federal, state and local taxes |
| Net Pay Formula | Gross Pay - Deductions = Net Pay |
| Gross Pay Calculation | Hourly wage x hours worked. Example: $12/hr x 40 hrs = $480 Gross Pay |
| When do you start paying taxes? | When you make more than the income requirement. |
| 401K | This withholding puts money into a retirement investment fund that you will manage? |
| How much does a self-employed individual have to make in order to file a federal tax return? | $400 |
| The due date for filing your federal income tax return or to request an extension? | April 15 |
| Tax Deadline for someone who requested an extension? | October 15 |
| Gross Pay | Gross pay is the total amount of an employee's earnings before any deductions for taxes |
| Net Pay | Net pay, also called "take-home pay," is the money an employee actually receives after all deductions. |
| How long do you have to file a federal tax return if you are owed a refund and get your money? | 3 years |
| What is the amount of the self-employment tax (SECA)? (This is for Social Security and Medicare for self-employed individuals) | 15.3% |
| Old-fashioned paper filing PROS | You are in control, it doesn’t cost anything, & no technology needed. |
| Old-fashioned paper filing CONS | It’s possible that you could make mistakes, longer to get your refund, & more time and effort on your part. |
| Hiring a tax professional PROS | Expertise and Accuracy, Potentially a better refund, saves time and stress for you, and assistance if you get audited. |
| Hiring a tax professional CONS | The most expensive option and there is a potential of fraud depending on who you use to file your taxes. |
| Tax preparation website PROS | convenient, faster processing of your refund, cost effectiveness, & your tax returns are all stored in the same place if you use the same service every year. |
| Tax preparation website CONS | It does cost money and they might try to upsell you to get you to pay more, still a risk of errors on your part, & Limited support if you need it. |
| What is the amount of the self-employment tax (SECA)? (This is for Social Security and Medicare for self-employed individuals) | 15.3% |
| How long do you have to file a federal tax return if you are owed a refund? | 3 years |
| Why is it important to correctly fill out a W-4 form? | It determines how much money is withheld from your paycheck and can result in under or overpayment of taxes if filled out incorrectly |
Created by:
LindsayMiller344