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Name: _____________________________________________________________________________
14. Last year, Karin was earning a $40,000 salary, but received no health care or retirement benefits from her employer. This year, her employer is offering a benefits package; Karin still earns $40,000 but a portion of her earnings are now deducted to pay for her benefits. Will Karin pay more or less income tax than she did last year? Explain your answer. _ ____________________________________________________________________ _ ____________________________________________________________________ _ ____________________________________________________________________ PRODUCT PREVIEW 15. T F Many employers pay for a minimum amount of life insurance coverage. 16. Which of the following is something you can do to reduce your taxable income? a. ask to be paid in a foreign currency b. maximize your contribution to your 401(k) plan c. report a lower annual income on your Form 1040 d. purchase an annual tax exemption from the IRS 17. On a paycheck stub, the Social Security tax may be designated as: a. OASDI b. FICA/SS c. Social Security tax d. All of the above 18. T F All local governments charge a small income tax. 19. At the end of the year, employees receive an IRS W-2 form that shows them which of the following? a. their total earnings and withholdings for the year b. all the exemptions they are eligible for c. their net pay after withholdings d. their total state tax bill 20. Lena is a conservation scientist. She made $44,752 at her job this year. She earned $1,295 in extra income working as a science counselor at her community science camp and $658 from a book she wrote on backyard ecosystems. What is her gross income? Her deductions totaled $18,125. Based on those numbers, what is Lena’s adjusted gross income? _ ____________________________________________________________________
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Chapter 5 | Honey, They Shrunk My Paycheck
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