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Only employees pay Social Security taxes on their earnings.

True

False

False. Employers pay the same amount on behalf of their employees, according to how much the employees pay.

Which type of account helps you pay for medical expenses while also saving you money on taxes?

401k

Flexible spending account

IRA

Flexible spending account. A flexible spending account lets you set aside money from your pay, thus reducing the amount of income you will be taxed on.

The federal tax rate you pay will vary depending on your age.

True

False

False. It varies depending on your filing status.

The difference between a tax deduction and a tax credit is that _______.

A tax deduction reduces your taxable income, and a tax credit reduces your actual tax

A tax deduction reduces your actual tax, and a tax credit reduces your taxable income

A tax deduction always gets you more money at tax time

None of the above

A tax deduction reduces your taxable income, and a tax credit reduces your actual tax. When you do the math, you will find that tax credits get you more money back than tax deductions do.

If you had more income tax taken out of your paycheck than you actually owe in taxes, what can you expect to happen?

You will get a refund.

You will owe more taxes.

The government will call it even.

You will get a refund. You had too much taken out. When you do your taxes in the spring, you will find out how much you will get back.