Theme 6: Understanding the IRSLesson 2: Your First Job
When you have an earned income, it is your responsibility to pay taxes. Federal income tax is most often collected on a pay-as-you-go basis. Employees usually have taxes taken out of, or withheld from, each paycheck that is subject to tax. Some people are exempt from tax withholding.
When you start a new job, your employer will ask you to provide information on Form W-4. This will help your employer determine how much money to withhold from your wages. It is important to fill out your form accurately and completely.
After you enter the workforce, it is essential to keep accurate financial records. Two basic systems for recordkeeping are on paper and on a computer.
Activity 1: Form W-4 Learn how to find the forms you'll need on the IRS Web site.
Activity 2: Financial Recordkeeping Determine your best financial record-keeping option.
Activity 3: Tax Your Memory Test your tax IQ.
Complete the assessment page to test your understanding of Your First Job.
Visit Social Security Online for more information on Social Security.
Why does an employer need a Form W-4 from each employee?
Did You Know?
The most misused Social Security number of all time was 078-05-1120. In 1938, as part of a promotion to sell wallets through Woolworth and other department stores, wallet manufacturer E. H. Ferree Company wanted to demonstrate how a Social Security card would fit into its wallets. A sample card was placed inside each wallet and displayed the Social Security number of the company's secretary, Mrs. Hilda Schrader Whitcher. Even though the sample card was half of the size of an actual Social Security card, was written in red, and had Specimen written in bold, many people confusedly used this as their own Social Security number. In 1943, 5,755 people were using Hilda's number.
Test your tax trivia knowledge by answering the following multiple-choice question. To assess your answer, click the Check My Answers button.
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