I am 16 but I just got a job..I don't know how taxes work and my parents are too busy to ask, if anyone could just give me some outlines on it all, or a website I can go to and read on the subject, I would be very much obliged.
2007-08-05 07:06:52 · 6 answers · asked by Johanna F 1 in Business & Finance ➔ Taxes ➔ United States
At 16 you are most likely still a dependent of your parents. This means that you're still living at home, and they are probably still mainly supporting you rather than you supporting yourself.
From your paycheck the employer will deduct 7.65% for social security and medicare. They might also take out money for income taxes. They should have had you fill out something called a W-4 when you started - this tells them how much to take out for income tax. You should have filled it out as single - zero allowances if you are a dependent. If you aren't going to make enough to owe any taxes, you could also fill it out as "exempt" which means they won't take out anything for income tax. But if you file as "exempt" and end up owing taxes, you could have problems.
Whether you'll owe income taxes depends on how much you make for the year. If you make under $5350 you won't owe any federal income tax - if any is deducted, you can file a tax return and get it refunded to you.
Depending on where you live, you might or might not owe state or local income tax.
irs.gov is the IRS website and has tons of information, but if you don't know what you're looking for, it can be somewhat overwhelming.
2007-08-05 07:17:56 · answer #1 · answered by Judy 7 · 2⤊ 1⤋
Very vague question. I assume you mean what will be coming out of your check each week and what those amounts go towards.
Typically you will have deductions on your check for at least 3 things, Federal Withholdings, Social Security, and Medicare. These are often refered to as FICA.
Your Federal Withholdings are estimated payments you are making towards your Income Tax. This gets calculated based on the amount of pay you recieve and the number of withholdings you claimed on your W-4. Being 16 you probably want to check with your parents to see what you should be claiming because they most like are still claiming you as a dependant and any income you eard will be reported on their Individual Return. You can usually change these withholdings by filling out a new W-4 with your employer at anytime.
Social Security and Medicare are taxes taken out of your check to provide you with money for retirement and medical services when you are older. The money that is taken out of your check is also matched by your employer in effect doubling your contribution. After a few years you will start recieving statements from the Social Security Administration telling you what your anticipated draw will be upon retirement.
In addition to these taxes your employer will also be paying Unemployment Taxes to a state agency and federal agency. These taxes wont appear on your check as a deduction(in fact I believe its illegal for them to deduct the cost of those taxes) but the are an expense the employer incurs.
Overall, its basically the government telling you and your employer that you are too stupid and irresponsible to set asside your own money to meet your income tax obligation and save money for retirement so they are going to do it for you. What is sad is so many people use their withholdings as a savings account and have no idea how much they actually pay in taxes. All they know is that they get a nice refund check once a year that they can go and blow on a nice shopping trip or catch up on their bills. They never once think that that money was theirs all along and only let the government hold it interests free for a year, year and a half.
2007-08-05 07:26:21 · answer #2 · answered by SNCK 3 · 0⤊ 0⤋
Congratulations on your first job. I hope you do well.
Anyway, to answer your question, the IRS has an informational website just for teachers and students. Lots of good information there.
http://www.irs.gov/app/understandingTaxes/jsp/s_student_lessons.jsp
You may be interested in a particular lesson, "Your first job". However, this lesson does build on information from some of the other lessons. You can probably skim through some of the other lessons.
http://www.irs.gov/app/understandingTaxes/servlet/IWT6L2ol
Good luck,
2007-08-05 07:16:31 · answer #3 · answered by NGC6205 7 · 2⤊ 0⤋
It's simple. You go to work and government officials take some of your money. Then they make sure that most of it goes into their bank accounts so they can live like royalty. Then when they retire they continue to collect full pay checks for the rest of their royal lives without having to work another day. Imagine working for 4 years and then collecting a full pay check for the rest of your life. The president alone will collect $400,000.00 every year for life.
2007-08-05 07:17:49 · answer #4 · answered by Anonymous · 0⤊ 1⤋
Start here...
http://en.wikipedia.org/wiki/Taxes
2007-08-05 07:12:25 · answer #5 · answered by mister_galager 5 · 0⤊ 0⤋
check the below link its good
http://workathomedatentryworks.blogspot.com
.
2007-08-07 20:45:51 · answer #6 · answered by rajee s 1 · 0⤊ 0⤋