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Get Know Your Dough Lesson 2 Answers

N Dough given his hourly wage and the number of hours worked. They compare gross pay with net pay. They learn what FICA and federal income taxes are. They learn how to complete Form W-4 and about Form W-2. In the assessment, students re-read the information provided on a W-4 and provide a more easily understood explanation to a friend in an e-mail. Grade Level 6-12 Concepts FICA tax Form W-2 Form W-4 Gross pay Income Income tax Net pay Taxes Wages Objectives Students will define income,.

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The W-2 reports how much you earned from your employer as well as how much tax was withheld on your behalf during the tax year. You should consider reviewing your tax withholding annually to ensure you withhold the correct amount of money from your paychecks.

Gross pay is how much employees earn before taxes and other withholdings, whereas net pay is the amount of money employees actually take home after all payroll deductions.

Purpose of the form W-4 forms serve as instructions that an employer uses to withhold taxes from their staff's paycheck, and a W-2 is a report of those withholdings at the end of the year. W-4s are essential for correct payroll processing and accurate tax reporting.

Compensation received by employees for services performed. Usually, wages are computed by multiplying an hourly pay rate by the number of hours worked. Money, for example, that employers withhold from employees paychecks.

Understanding the W-2 The left side of the form reports the personal information of the taxpayer such as social security number, employer EIN, and employer address. The right side of the form reports employee earnings and federal tax information. The bottom of the form reports state and local tax information.

Form W-4 tells you, as the employer, the employee's filing status, multiple jobs adjustments, amount of credits, amount of other income, amount of deductions, and any additional amount to withhold from each paycheck to use to compute the amount of federal income tax to deduct and withhold from the employee's pay.

Why can't John claim exempt status? (This is John's first job. To know if he meets both criteria for exemption—zero tax liability and an earned income below the threshold—he would have had to file a tax return the previous year.)

Form W-2 reflects your income earned and taxes withheld from the prior year to be reported on your income tax returns. Employers use W-2s to report FICA taxes for employees.

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