Which of the following are two mandatory categories of government spending funded by payroll taxes?
Infrastructure and housing assistance
Environmental protection and transportation
National defense and education
Social Security and Medicare
On a pay stub, the amount of money remaining after deductions and withholdings is known as…
Gross income
Withheld earnings
Net pay
Taxable income
Which statement best describes discretionary government spending?
It consists of spending that Congress must approve annually, such as funding for education and defense.
It refers to tax breaks and subsidies that automatically adjust based on economic conditions
It is required by law and primarily funds entitlement programs like Social Security and Medicare.
It includes expenses that the government must pay, such as interest on the national debt.
You recently accepted a new job, and your first day is next week. What form will you have to complete before receiving your first paycheck?
W-2 Form
1040 Form
1099 Form
W-4 Form
You were unable to file your taxes before the April deadline, and your application for an extension was approved. To which month was your deadline extended?
December
October
September
June
Which of the following statements most accurately describes why it’s important to correctly fill out a W-4 form?
It is required to verify your employment eligibility in the United States.
It determines how much money your employer will withhold for taxes, impacting your paycheck and potential tax refund.
It ensures you receive benefits such as Social Security and Medicare.
It is used to report your yearly income to the IRS for tax filing purposes.
All of the following people can be claimed as a dependent for tax purposes EXCEPT…
A 45-year-old friend who rents a room in your house and pays their own expenses.
A 22-year-old full-time college student who relies on their parents for most expenses.
A 30-year-old sibling with no income who lives with and is financially supported by their brother.
A 10-year-old child living with their parent who provides full financial support.
You are required to file a tax return in all of the following scenarios EXCEPT…
You earned income above the IRS filing threshold for your filing status.
You received self-employment income exceeding $400.
You had taxes withheld from your paycheck and want to claim a refund.
You earned below the IRS filing threshold and had no special filing requirements.
What is the purpose of the self-employment tax (SECA)?
To cover income taxes for self-employed individuals
To pay for business expenses and deductions
To fund Social Security and Medicare for self-employed individuals
To contribute to state and local tax funds
Which statement best describes the difference between gross income and taxable income?
Gross income is the amount you report on your tax return, while taxable income is the total amount subject to payroll taxes.
Gross income is the amount after taxes, while taxable income is the amount before taxes.
Gross income includes only wages, while taxable income includes all forms of income.
Gross income is the total income you earn, while taxable income is the amount left after deductions and exemptions.