Payroll and Taxes Quiz Questions with Complete Correct Answers | Grade A+

Why does the government need taxes? Ans: - To provide services that people want and need - Payroll taxes are collected from both you and your employer to pay for things such as FICA (Social Security and Medicare). What is one example of "mandatory" spending? Ans: Social Security is required by the government What is one example of "discretionary" spending? Ans: 57% of all discretionary spending goes to fund the military What is one benefit that you (or someone you personally know) receives as a result of government spending? Ans: the support and services provided to me What is the purpose of a W-4? Ans: - Lets your employer know how much money to withhold from your paycheck for federal taxes - Determines the percentage of gross pay which will be withheld for taxes What is an allowance? Ans: used to determine the amount of federal taxes withheld from the paycheck What is a dependent? Ans: a person who relies on the taxpayer for financial support, like a child or nonworking adult Why is it helpful to the taxpayer to have your taxes deducted from every paycheck? Ans: it allows them to not have to worry about paying them all at once at the end of the year Why do we pay taxes? Ans: pay for public goods, police, roads, schools, etc. Identify and explain two deductions you will see on your pay stub. Ans: - Federal income tax/ state income tax helps pay for things like roads, military, school, police departments, etc. - FICA includes Medicare and Social Security, which helps fund federal government programs for retirement and disability Net pay Ans: the amount of money you take home after taxes and other expenses are taken out Gross Pa