1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 1 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Your Job & Taxes

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Starting a New Job To receive a paycheck, an employee must: Complete a Form W-4 Employee’s Withholding Allowance Certificate Determines the amount of money withheld for taxes

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Completing a W-4

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Form W-4 Allowances Allowance May claim an allowance only if no one else claims that person as a dependent Dependent - person who relies on the taxpayer for financial support Qualifying child Qualifying adult relative Rule of thumb = may (but not required) claim an allowance for every dependent

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 5 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona The higher the number of allowances, the less taxes they take out. The lower the number, the more taxes out.

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 6 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Starting a New Job Complete a Form I-9 Used to prove the identity of people and avoid hiring non United States citizens Must provide at least 2 of the following –passport –driver’s license –U.S. military card –Social Security card –birth certificate

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 7 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 8 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Sample Paycheck Stub Terrific Tacos Employee Paycheck, Patty SSN/Employee Identification Number Check # 164 Check Amount (net income) $ Employee Address 293 Michael Grove Billings, MT Pay Type- Gross Income DeductionsCurrentYear-to-date $180.00Federal Withholding State Withholding FICA $14.10 $5.45 $13.77 $ $ $ Totals$33.32$ Pay Period 6/11/2007-6/25/2007

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 9 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Taxes Deductions from your Paycheck Income Taxes Federal Largest % State Payroll Taxes Social Security Medicare Payroll tax – A tax on earned income that supports the Social Security and Medicare programs (also known as FICA)

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 10 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Income tax Income tax - tax on earned and unearned income Earned income - money earned from working for pay Unearned income - income received from sources other than employment Example: Wages and salaries earned from employment Example: Interest earned from a savings account

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 11 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona What are benefits of being a part of these tax paying communities? Roads Libraries Military for national security Public schools Police and fire departments Recreation (parks, trails) ?

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 12 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona “You are better off being in a community than by yourself” As a community member you receive many benefits you could not pay for individually Taxes are a way members of a community provide for one another

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 13 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona What is Federal Taxes? Purpose Tax charged Supports Federal Programs Military Education Grants Disasters Research Benefits LINK 10% of earned income Changes based on your tax bracket

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 14 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona What is State Tax? PurposeTax charged These support State Gov’t. Programs Head Start Med Assistance Programs School Breakfast Pro NE Unemployment Insur. NE Benefits LINK 5.5% of earned income Can changed based on location within the state

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 15 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona What is Social Security? PurposeTax charged Income for: Retirees People with profound disability Children who have lost a parent A person with children who has experienced the death of a spouse 6.2% of earned income (decreased to 4.2% for ) Up to an annual maximum

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 16 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona What is Medicare? PurposeTax charged Helps pay for health care for senior citizens 1.45% of earned income No limit

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 17 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona The form that an employer must send to an employee and the IRS at the end of the year. The W-2 form reports an employee's annual wages and the amount of taxes withheld from his or her paycheck.

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 18 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1040EZ Form "income tax return for single and joint filers with no dependents" "easy form" An alternative to the Internal Revenue Service's (IRS) 1040 income tax form –offers a faster and easier way to file taxes Meant for taxpayers with very basic tax situations Usually the first tax form filled out

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 19 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1040EZ cont. In order to be eligible to use this form the individual must have –a taxable income of less than $100,000 –interest income of $1,500 or less –possess no dependents –no real estate assets –no tax shelters –no foreign income

1.3.4.G1 © Take Charge Today – February 2006– Planet Paycheck – Slide 20 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona