Exam (elaborations)
FIN LIT TAXES QUESTIONS AND ANSWERS 2024
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Exam of 5 pages for the course taxes at taxes (FIN LIT TAXES)
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FIN LIT TAXESBriefly describe the purpose of taxes. - answer Taxes are the primary source of revenue
for most governments. Among other things, this money is spent on essential things; to
improve and maintain public infrastructure, including the roads we travel on, and fund
public services, such as schools, emergency services, and welfare programs.
Medicare and Social Security are mandatory spending categories funded by which type
of taxes that are withheld from your paycheck? - answerFICA
The federal income taxes that are withheld from your paycheck are used to pay for
what? - answerMandatory spending
All of the following options are benefits we receive as a result of government spending
EXCEPT... - answerCredit card debt forgiveness
What is the difference between gross pay and net pay? - answerGross pay is before
taxes and deductions are subtracted; Net pay is your take-home pay
What are Pre-Tax Deductions and Contributions? - answerContributions taken out of
your paycheck BEFORE taxes are calculated on your income
What are two examples of Employer Contributions? - answerHealth insurance and
401(k)
401(k) and Roth IRA
Which of the following are two mandatory categories of government spending that are
paid for by FICA taxes? - answerSocial Security and Medicare
On a pay stub, the amount of money that is left after withholdings is known as... -
answerNet pay
Which statement best describes discretionary government spending? - answerA
changing amount of money spent on different categories each year (housing, health
related services, etc.)
You recently accepted a new job and your first day is next week. What form will you
have to complete before you receive your first paycheck? - answerW-4
You were unable to file your taxes before the April deadline and your application for an
extension was approved. What month was your deadline extended to? - answerOctober
, Which of the following statements most accurately describes why it's important to
correctly fill out a W-4 form? - answerIt determines how much money is withheld from
your paycheck and can result in under or overpayment of taxes if filled out incorrectly
Which of the following statements about the W-4 form is TRUE? - answerThis form is
given to employees on their first day on the job
The purpose of the form is to let employers know how much money to withhold from an
employee's paycheck for taxes
Miguel has been working at his job for 3 years and already filled out a W-4 when he was
first hired. This year, he just got married and is planning on filing his taxes jointly with
his spouse. What should he do? - answerRequest to fill out a new W-4 from his
employer
You will need to include all of the following information on a W-4 form EXCEPT... -
answerEarned income from previous job
w-2 - answerI am received in January
There is one of me for every job you work
You can tell how much you earned and how much you paid in taxes by reading me
1099 - answerI am received in January
You get me if you are not an employee, but were paid by a company
You can also get me for other types of income, such as gains and losses in brokerage
accounts, dividend and interest payments, and more
You probably didn't get taxes withheld if you got me, so you may have a big tax bill
coming up
Uber drivers, social media people...
If you have interest on your bank account
1040 - answerI am completed every April
Anyone can use me
Beware, there is a LOT to fill out
w-4 - answerI am received whenever you start a job
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