w-4’s, w-2’s, and tax returns. financial planning earningsavings spending investing tax planning...
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Dollars & SenseW-4’s, W-2’s, and Tax Returns
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Financial Planning
Financial Planning
Earning
Savings
SpendingInvesti
ng
Tax Planning
Retirement Planning
Estate Planning
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What is a W-4?
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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
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Pay-as-you-go systemEach pay period, a portion of your check goes
toward your tax obligation
Jan. 1 April 15Dec. 30
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Example:Results of Pay-As-You-Go
$10,000 Income
10% Tax Rate
$1,000 Amount Owed
REFUND OWE
$1,000 Amount owed
$1,000 Amount owed
$1,200 Amount paid
$900 Amount paid
$200 Refund $100 Payment
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How 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.
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W-4 Form: If not exempt…Fill 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 Pay Refund
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Impact of Allowances
Your Income Allowances W-4 Impact Net Pay Est. Federal Tax Due Result$ Withheld
$20,000 0 $3,000 $17,000 $2,000 $1,000
$20,000 1 $2,500 $17,500 $2,000 $500
$20,000 2 $1,900 $18,100 $2,000 -$100
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What is a W-2?
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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
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How do I complete a tax return?
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How much will I owe?2010 Federal Income Tax Brackets
2009 Federal Income Tax Brackets
www.moneybluebook.com
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Federal Tax ReturnFor a single person or married persons with no itemized deductions, complete Form 1040EZ
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State Tax ReturnFor a single person or married persons with no itemized deductions, complete Form WI-Z
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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.Maria’s 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.
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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.Maria’s 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.
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AssignmentComplete a 1040EZ and WI-Z tax return for
Sammy Dawson