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Understanding your Paycheck

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Presentation on theme: "Understanding your Paycheck"— Presentation transcript:

1 Understanding your Paycheck

2 What information in on a pay stub?
Gross wages- how much you earn before taxes and other deductions Net wages- amount left after deductions

3 What information in on a pay stub?
Payroll taxes- taken by federal and state government. Other deductions: Local taxes Contribution to health insurance Retirement plans Union dues FICA: Federal Insurance Contribution Act- deductions to support retirement plans like Medicare and Social Security

4 Paying Your Taxes

5 How do I pay taxes? In your check, taxes are deducted
You also say a sales tax every time you buy something You pay an excise tax on tobacco, alcohol, gasoline, and other luxury items You pay property taxes if you own a home

6 How do you file your income taxes?
If you earn more than $4,000 a year, you have to file taxes Select an appropriate filing category Single, head of house, married and filing jointly, or married filing separately Select the appropriate form 1040EZ, 1040

7 What are my deductions? An employer provides a W-2 stating earnings and deductions. (if your employer does not give you one by January 31st, report them to the IRS) Possible Deductions: $ in a IRA (individual retirement plan) Medical expenses more that 7.5% of your income Charitable donations Work related expenses Interest paid Children or other dependents

8 You can mail a paper copy Send it electronically
How do I send in my taxes? You can mail a paper copy Send it electronically They must be postmarked by midnight April 15th!!!

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