Planning Beginner: Understanding Your Payroll Taxes

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1.
Employers must report and deposit payroll taxes directly with the federal government themselves.
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False. They can have payroll companies do it for them.
2.
There is one federal income tax rate that all taxpayers pay.
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False. As you earn more money, your rate increases.
3.
The purpose of the W-4 form that you fill out when starting a new job is to determine _______.
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How much should be withheld from your paycheck for federal income taxes. The W-4 helps you and your employer avoid overpaying or underpaying throughout the year.
4.
Medicare taxes fund health coverage for people over age 65.
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True. Medicare is a government-run health program.
5.
Social Security is a federally sponsored _______.
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Retirement and disability income program, but not a health insurance program. Medicare is a health insurance program, but Social Security is not.