Name:
Date:
CHAPTER 6
Paying Taxes
VOCABULARY CHECK
take-home pay
1. Gera’s
was less than what she expected
because of all the taxes that were taken out.
2. Matthew had to pay
chased.
sales tax
adjusted gross
income
capital gain
on the car he pur-
gross income
3. Money collected by the government for the purpose of operating
tax
the government is called a
.
4. If Robin multiplied her hourly wage by the number of hours she
gross pay
worked, she would be able to figure her
.
payroll tax
5. Bobby’s employer was required to withhold
on all the employees at the pizza parlor and pay that amount to
the government every quarter.
Internal Revenue
Service
itemized deduction
Medicare
net pay
payroll tax
6. To find out more about paying taxes, Horace went to the
Internal Revenue Service Web site.
tax return
7. Amanda had to file a
her earnings from her job at the gym.
gross pay
personal income tax
before April 15 on
sales tax
Social Security
8. Colin found out that FICA was money withheld and sent to the
Social Security
government that funded
and
Medicare
for retirees.
standard
deduction
9. The taxes imposed on Milad’s earnings reflect his
personal income tax
.
tax
take-home pay
tax return
10. The first step for Amanda to calculate how much federal tax she
gross income
owes was to determine her
. This would
be her income from almost any source, especially her job at the gym.
11. Dillon’s dad sold stock for a profit and had to report the
tax return.
capital gain
on his
itemized deductions
standard deductions
12. Amanda needed to calculate her
and
for her tax return to determine which method would give her the smallest tax liability.
net pay
13. Robin’s mother reminded her that her
her gross pay because taxes would be taken out.
would not be the same as
adjusted gross income
14. Amanda’s
was figured after she subtracted her allowable
amounts, such as moving expenses and student loan interest paid, from her total income.
62
Name:
Date:
CHAPTER 6
Paying Taxes
CHECK YOUR KNOWLEDGE
Multiple Choice Questions Circle the correct answer for each of the following.
1. Money collected from individuals and corporations by some branch of the government is
known as (a) __________.
a. tax b. net pay
c. gross pay
d. fundage
2. A synonym for take-home pay is __________.
a. gross pay
b. tax
c. FICA
d. net pay 3. Payroll taxes can include all of the following except __________.
a. state income tax
b. sales tax c. federal income tax
d. FICA
4. The federal tax system is carried out by the __________.
a. Internal Revenue Service b. Federal Deposit Insurance Corporation
c. Federal Taxation Office
d. U.S. Treasury
5. By law federal tax returns must be filed by what date?
a. January 1
b. December 31
c. May 2
d. April 15 6. A(n) __________ formally reports your tax information to the federal government.
a. confirmation letter
b. tax return c. payroll stub
d. income report
7. Which of the following is not a possible filing status used when filing your federal
income tax return?
a. single
b. head of household
c. siblings filing jointly d. married filing separate return
63
8. For tax purposes, if you sell an asset for more than you paid for it, you will have what is
called a(n) __________.
a. capital gain b. tax deduction
c. tax credit
d. capital loss
9. Gross income includes all of the following except __________.
a. tips
b. child support payments received c. wages
d. game show winnings
10. Taxes impact all of the following financial decisions except __________.
a. whether to rent or buy
b. where to live
c. investment options
d. the type of clothing to wear 64
SCANS Foundation Skills: Basic