Taxes

Question 1

Medicare

Answer 1

1.45% gross income

Pays for health care of those 65 and older

Question 2

Social securities

Answer 2

6. 2% gross income
   - Both employe and employer pay social security tax
   - No longer deducted after you reach 118,500

Question 3

State income tax uses how much gross income?

Answer 3

3.75% Gross income

Question 4

Federal tax income is determined by what?

Answer 4

Determined by how you complete the W-4 form

Question 5

Where does the federal gov get its money?

Answer 5

Income taxes
Social security taxes
Medicare taxes

Question 6

Where does the state gov get its money?

Answer 6

Income taxes and Sales taxes

Question 7

Where does the local gov. get it’s money?

Answer 7

Sales taxes and Property taxes

Question 8

What does the federal gov put its money into?

Answer 8

Health care
Social security/Pensions
Defense

Question 9

What does the state gov do with its money?

Answer 9

Education
Highways
Public assistance

Question 10

Local gov uses its money to fund…?

Answer 10

Education
Roadways
Public assistance

Question 11

Which gov funds each of these?

Defense, roadways, and education?

Answer 11

Federal, local, and state gov

Question 12

Proportional tax (flat tax) is what kind of tax?

Answer 12

State income tax

Same rate for all people

Question 13

Regressive tax

Answer 13

Taxes that hurt lower income individuals more than wealthier ones
(It’s a Sales tax and property tax)

Question 14

Progressive tax

Answer 14

The more you earn, the more you pay

It’s a Federal income tax

Question 15

Tax liability

Answer 15

The tax you owe and are responsible for paying

Question 16

Exemptions do what to your income?

Answer 16

Reduces it by a specific sum for each person you support (including yourself)

Question 17

Filing status does what?

Answer 17

Determines which tax form you use, and how much tax you must pay

Question 18

Married filing jointly definition

Answer 18

Married the last day of the year, are combining incomes and tax liabilities

Question 19

Tax credit

Answer 19

A reduction in the amount of your tax liabilities

Question 20

Hi

Answer 20

Hi

Question 21

Allowance certificate

Answer 21

Tells employers how much federal tax to withhold from your check

You fill out this form at the start of every job

Question 22

Wages and tax statement

Answer 22

List wages, tips, federal income tax, social security, and Medicare contributions for the year
(receive one for each job from that year)

Question 23

1040-“long form”

Answer 23

Can be used by anyone
Must be used if taxable income is over $100,000
Self employment income
Have Dependents

Question 24

Social security provide what for whom?

Answer 24

Monetary benefits for retired, disabled, or survivors

Question 25

What type of tax is a social security tax?

Answer 25

Proportional | everyone gets same % of income

Question 26

FICA stands for what?

Answer 26

Federal insurance contributions act | social security + Medicare

Question 27

Social security's biggest problem

Answer 27

Not enough money to pay its benefits

Question 28

The significance of the numbers addicted as a persons social security # XXX - XX - XXXX

Answer 28

#Area - #group - #serial Area-persons state of residence Group-no significance

Question 29

Where does the fed gov get most of its money? The Illinois state gov?

Answer 29

Federal income tax State income tax

Question 30

W-2 form

Answer 30

Sent by employer. Lists all wages, tips received, and income tax paid through the year

Question 31

W-4 form

Answer 31

Filled out by employe, so the employer can withhold the correct amount of federal income tax from their paychecks

Question 32

When must your income taxes be filled out?

Answer 32

April 15

Question 33

1040, 1040A, and 1040EZ all do what?

Answer 33

Help you calculate how much tax you owe

Question 34

INT-1099

Answer 34

Bank tells you and the IRS how much interest you receive

Question 35

1040A

Answer 35

Can be used by anyone Dependents, Less than 100,000 IRA contributions, over 1,500 No itemized deductions

Question 36

1040 EZ

Answer 36

Single or married filing jointly No dependents Under 100,000 and 1,500

Question 37

Filing which number on the w-4 will deduct the most money from your paycheck?

Answer 37

0

Question 38

Which form would you complete if you used these? Taxable income over 100,000 Itemized deduction (mortgage, student loan interest, etc...)

Answer 38

1040

Question 39

Tax deduction vs Tax credit

Answer 39

Tax Deduction: Reduces taxable income Tax Credit: Reduces tax liability

Question 42

(blank) reduces your taxable income by using a set dollar amount put in place by the IRS

Answer 42

Standard deduction