GETTING PAID WHERE DOES MY MONEY GO?. PAY CHECK DEDUCTIONS Deductions Video What is the difference between gross and net income? What are state taxes.

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Presentation transcript:

GETTING PAID WHERE DOES MY MONEY GO?

PAY CHECK DEDUCTIONS Deductions Video What is the difference between gross and net income? What are state taxes used for? What are federal taxes used for? What is Social Security used for? What is Medicare? What other deductions may come out of your paycheck?

TAX DEDUCTIONS Federal Tax:: (based on income scale on the following slide) Colorado State Tax: 4.63 % Social Security: 6.2% Medicare: 1.45% -FICA (social security and Medicare combined) 7.65%

2015 FEDERAL TAX BRACKETS Practice: What % should you pay if you are single and make $65,000? How about if you were married and you make $50,000 and your spouse makes $65,000? Filing Jointly

IMPORTANT TAX FORMS What is a W4 The W-4 is an Internal Revenue Service (IRS) form you complete to let your employer know how much money to withhold from your paycheck for federal taxes. What is a W2: The IRS requires employers to report wage and salary information for employees on Form W-2. Your W-2 also reports the amount of federal, state and other taxes withheld from your paycheck. To insure you have it in time, the IRS requires your employer to send you a W-2 no later than January 31 Tell you partner in your own words: Explain the difference between a W2 and W4. TAX-FORMS/WHAT-IS-A-W-4-FORM-/INF14815.HTML

WHAT SHOULD I CLAIM ON MY W-4? The W-4 is based on the idea of "allowances." The more allowances you claim, the less money your employer will withhold for taxes. You get one allowance for yourself, one for your spouse and one for each dependent you report on your tax return. Am I exempt from Federal taxes? if you are a single taxpayer who earns approximately $8,000 every year, then you will not owe federal income tax because of the personal exemption and standard deduction you can claim on your tax return, which effectively eliminates the possibility of owing tax on your $8,000 of earnings.

WHAT SHOULD YOU CLAIM?

QUESTIONS?