Understanding Taxes Worksheet

University of Phoenix Material

Understanding Taxes Worksheet

Resources: The United Stated Internal Revenue Service at www.IRS.gov

Directions: Use the links provided for each tax form and the class text to answer the questions below. If a word count is required for the question it will be listed in that question.

Understanding the 1040 Forms

Visit The 1040A form at http://www.irs.gov/pub/irs-pdf/f1040a.pdf . The 1040EZ form at http://www.irs.gov/pub/irs-pdf/f1040ez.pdf . And the 1040 form at http://www.irs.gov/pub/irs-pdf/f1040.pdf .

1. Compare and contrast the 1040, 1040A, and 1040EZ forms. How is each form different? Who would or must use each form? Which form did you use in your last filing? (Answer in at least 50 words.)

2. Who is eligible to file with “head of household” status; what is the criteria? What are the benefits of filing as head of household rather than single? (Answer in at least 50 words.)

3. What is adjusted gross income (AGI) and what line of the 1040A shows this amount? On which line of the 1040A tax form is total income located?

4. What lines would student loan interest deductions and tuition and fees be located on the 1040A form? What form is used to help with a student’s tuition and fees?

5. What is a tax credit? What is a tax deduction? Be sure to define the difference between the two.

Visit W-2 Wage and Tax Form at http://www.irs.gov/pub/irs-pdf/fw2.pdf .

6. What is the primary purpose of the W-2 Wage and Tax Forms?

7. When does a taxpayer receive the W-2? Who will provide this form to the taxpayer?

8. What items on the W-2 make up Federal Insurance Contributions Act or FICA?

9. If there is an amount in box 10 of the W-2 for Dependent Care Benefits, what form would you complete to determine any taxable amount?

10. What is the date that taxes are due? If you need an extension what form would you use? How long is the extension? Are there any penalties for requesting an extension? (Answer in at least 50 words.)