Dollars & Sense

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Dollars & Sense. W-4’s, W-2’s, and Tax Returns. Financial Planning. What is a W-4?. On what day of the year are income tax returns due to the United States federal government (also known as “tax day”)? April 15. Q&A. Jan. 1. Dec. 30. April 15. Pay-as-you-go system. - PowerPoint PPT Presentation

Text of Dollars & Sense

Dollars & Sense

Dollars & SenseW-4s, W-2s, and Tax ReturnsFinancial PlanningWhat is a W-4?Q&AOn what day of the year are income tax returns due to the United States federal government (also known as tax day)?

April 15

Pay-as-you-go systemEach pay period, a portion of your check goes toward your tax obligationJan. 1April 15Dec. 30Example:Results of Pay-As-You-Go$10,000Income10%Tax Rate$1,000Amount OwedREFUNDOWE$1,000Amount owed$1,000Amount owed$1,200Amount paid$900Amount paid$200Refund$100PaymentHow does your employer know how much money to take out?Based on how you filled out your W-4 form.

Purpose of W-4: determine how much federal income tax will be taken out of your paycheck each pay period.

W-4 Form: If not exemptFill out allowances worksheetAllowances: reduce your taxable income ($3,400)As a teenager, you must put zero allowancesThe less allowance you claim, the more $$ taken out

Allowances$ Taken Out (Taxes)Net PayRefundImpact of Allowances

What is a W-2?What do you need to complete your tax returns?Income

W-2 Form(s)1099 Form(s)Other tax deductible statements

Tax forms or access to online forms

How do I complete a tax return?How much will I owe?2010 Federal Income Tax Brackets2009 Federal Income Tax Brackets

www.moneybluebook.comFederal Tax ReturnFor a single person or married persons with no itemized deductions, complete Form 1040EZ

State Tax ReturnFor a single person or married persons with no itemized deductions, complete Form WI-Z

Practice 1040EZPrepare a 1040EZ federal tax return for Maria Hunt using the information below. Maria is single and claims only herself.Maria M. Hunt / 54 Center Street / San Francisco, CA 96214-3627Social security number: 541-33-9892She wants $3 to go to the Presidential Election Campaign fund.Marias salary is $28,200, plus she earned interest of $155.No one else claims her as a dependent.Occupation: part-time engineerMaria had $3,660 in federal taxes withheld.Practice WI-ZPrepare a WI-Z state tax return for Marta M. Hunt using the information below. Marta is single and claims only herself as an exemption.Social security number: 383-65-3958Marta M. Hunt / 708 W. Milwaukee St./ Jefferson, WI 53549She wants $1 to go to the State Election Campaign fund.Tax district is the City of Jefferson, County of Jefferson, School district number 2702.Marias salary is $44,978, plus she earned interest of $365.No one else claims her as a dependent.Marta paid $7,200 in rent. Heat was not included.Maria had $1,877 in state taxes withheld.AssignmentComplete a 1040EZ and WI-Z tax return for Sammy DawsonSheet1Your IncomeAllowancesW-4 ImpactNet PayEst. Federal Tax DueResult$ Withheld$20,0000$3,000$17,000$2,000$1,000$20,0001$2,500$17,500$2,000$500$20,0002$1,900$18,100$2,000-$100

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