Instructor: Virginia Guilford Money Facts On the Job Instructor: Virginia Guilford

Please Be Aware This course does not give you professional advice I am not a lawyer. I am not an accountant. I am not a banker. This course explains the basic concepts and vocabulary that you need for job interviews and starting to work. Please note – the information in this class is not the kind of ‘official’ advice that you might get from an accountant, a banker, or a lawyer. I am not a professional, and I cannot give you professional advice about money.   But I have tried here to explain the vocabulary and the basic concepts used at work, at the bank or on credit card applications. I expect that this class will give you a better understanding of this old-fashioned and formal language. The Word document that I will make available by email after this workshop is complete contains a glossary where I have provided definitions for the most commonly used financial and business terms.

Talk about the Job “This position is a part-time, employee spot.” “Would you like to work for us as an employee or as a contractor?” “This job is temporary.” “This is a ‘try and buy’ spot.” . Has anyone heard comments like these during a job interview? There are a lot of slang expressions used in business – don’t try to memorize them all, because new terms are being invented every day. Just ask if you don’t know what something means. For example – a “try and buy’ position is one where you work as a contractor for a few weeks or months, and then, if they like you, you will be made an employee.

Kinds of Workers Employee Working as an employee means that your pay and your working conditions are regulated by Federal and State laws about employees. Full-Time Employee Part-Time Employee Hourly Employee Kinds of Workers You may be working as a full-time employee, a part-time employee, an hourly employee, or you may not be an employee at all, but working as a free-lance or contract worker. Working as an Employee Your pay and your working conditions are regulated by Federal and State laws about employees. Tax withholding. Benefits deductions. Other protection – severance pay, minimum wage. Full-Time Employee A full-time employee generally works 35 or 40 hours a week. You must be given a written statement describing the amount of your pay, uually in terms of annual pay - for example $28,000 per year. You will also be told what benefits come with this job. Part-Time Employee A part-time employee has an agreement to work a fixed number of hours, usually 20 hours or less each week. Part-time employees get some, but not all, of the benefits that full-time employees get. Hourly Employee If you are an hourly employee, you will be paid for each hour that you work.

Kinds of Workers Freelance / Contractor Working as a free-lancer or independent contractor is like having your own business. Negatives – You are only paid for the days you actually work – no paid holidays, vacation, or sick days You don’t receive any benefits – no health insurance Positives The company has more flexibility about what it will pay you. Your working hours and days can be tailored to your needs. Working as a Freelancer/Independent Working as a free-lancer or independent contractor can be like having your own business. You (or your business) must pay for any benefits that you want. You must make all the payments to the government for your taxes, Social Security and Medicare contributions. But some freelance work is very casual – like being a babysitter, or helping someone by walking their dog. If your work is very short-term and you only make a small amount of money, you probably won’t owe any tax on your earnings, and you don’t need to make any government payments. Q – has anyone worked as an employee? Has anyone worked as a freelancer or contractor? 5 5

Kinds of Workers Working for Tips Some workers get no pay at all, or very little pay. The only money they make is from the tips they receive from customers. Although it is not legal, workers in a nail salon may work for tips only. Most waiters and taxi drivers earn only a very small salary, and the majority of the money they make is from tips. Note: Many restaurants make their wait staff pay if the customer leaves without paying for the meal. This is illegal. If you are a waiter who is required to pay, call the help line at the US Dept of Labor, 866-487-9243 to report your employer. Working for Tips Working for tips is common in service work, like taxi drivers, waiters, and nail salon workers. The workers earn very little (and sometimes nothing) as a salary – the majority of their pay comes from tips. Working for tips can provide a good income, if the tips are high and the worker is very pleasing to the customers, but tips are not a guaranteed income. Q –Has anyone worked for tips? Are you comfortable with tipping? 6 6

Talk about Work Days “We work an 8 to 5 schedule.” “We are closed for the major holidays.” “This job provides for 5 sick days.” “You will earn 1.6 vacation days for every 20 working days. We give you 14 PTO days a year. Has anyone heard comments like this when starting a new job?

Working Hours and Paid Time Off Holidays Sick Days Vacation Every job has its own rules about what hours you are supposed to work. But it can be useful for you to know what the usual working hours are for most people.

Working Hours A full-time employee in a large corporation generally works 35 or 40 hours a week. The traditional hours for work are 9:00 AM to 5:00 PM. Part-time workers commonly work less than 20 hours a week. Working Hours A full time employee in a large corporation generally works 40 hours a week. The usual hours for work are 9:00 AM to 5:00 PM, Monday through Friday. Other common work schedules are 8:30 to 5:30, or 9:00 to 6:00, or 8:00 to 5:00. Some highly-paid workers, like lawyers or financial analysts, or executives, are expected to work many more than 40 hours a week, with no extra pay. But most lower-level jobs will either give you extra money, or give you compensatory time off, if you work longer than usual. Compensatory time off is often referred to as ‘comp time’.   Part-time workers commonly work less than 20 hours a week – sometimes they work just a few hours every day, or sometimes just 1 or 2 full days a week. QUESTIONS: What are the normal working hours in your country?

Holidays Holidays are days when your company is closed, and you are not obliged to come to work. If you are an employee, you won’t come to work, but you will still be paid as if you worked on that day. If you are a contractor or a temporary worker, you won’t come to work, but you will not be paid for that day. If you are a part-time worker, you may or may not be paid for the holiday, depending on whether you were scheduled to work on that day or not.

Holidays in the US Holidays observed by almost everyone: Thanksgiving (the 4th Thursday in November) Christmas Day (December 25) Additional holidays observed by most corporations: New Year’s Day (January 1) Memorial Day (last Monday in May) Independence Day (July 4) Labor Day (the first Monday in September) Other holidays commonly observed in some places: Martin Luther King Day (3rd Monday in January) Presidents’ Day (3rd Monday in February) Good Friday (Friday before Easter Sunday) Veterans’ Day (November 11) QUESTIONS: Does anyone work someplace that is open on some of these holidays? A restaurant? Does anyone work in a place that has different holidays? A religious institution might be closed on certain religious holidays that are not shown here. The first two lists of holidays are considered the ‘major holidays’. See detailed information about US Holidays at Wikipedia here en.wikipedia.org/wiki/Public_holidays_in_the_United_States

Sick Days Most companies allow you to stay home but still be paid if you are sick. This kind of paid time off is called Sick Pay or Sick Leave and the days you take off because of being not healthy enough to work are ‘sick days’. The number of sick days you can take is different at different companies. Question – have you ever stayed home from work because you were sick? Most companies allow you to stay home but still be paid if you are sick. This kind of paid time off is called Sick Pay, and the days you take off because of being sick are ‘sick days’. The number of sick days you can take is different at different companies. You only take sick days when you are sick. If you are not ever sick, you might not use any of your sick days.   Sick days do not usually need to be scheduled in advance, but it is expected that you will only take one or two sick days, unless you are seriously ill. Sometimes, you cannot take paid sick days unless you can actually prove that you were really sick. For example, some companies require you to provide a doctor’s note or letter explaining your illness, if you are sick for more than 3 days.

Vacation One or two weeks of paid vacation each year is usual for full-time employees. You may earn a certain number of days of vacation for each week or month that you work. Some companies are closed for a certain time when everyone takes their vacation. Some companies require you to schedule your vacation by asking for approval from your manager. Question – what is the usual amount of vacation time in your country? 1 week a year:? 2 weeks a year:? 4 weeks a year? None? The usual amount of paid vacation for full-time employees is one or two weeks. Three or four weeks of vacation is sometimes given to more senior employees or employees who have been with the company for many years.   Some companies closed for a certain time when everyone takes their vacation – for example, a company may close for the week between Christmas and New Year’s Day, or a factory may shut down every year in the month of August. If your company does not have an obligatory closed time when everyone takes vacation, you will have to schedule your vacation with your supervisor or manager. QUESTIONS: What is the vacation schedule where you work? Do you have more vacation than 2 weeks? No paid vacation at all?

Personal Days & Family Medical Leave Sometimes, a company will give employees two or three paid ‘personal’ days off in addition to vacation days. Large companies are required by the Family Medical Leave Act to provide 12 weeks of unpaid leave for extended family situations, such as illness or the birth of a child. Personal days are days off that you schedule in order to meet personal requirements, such as celebrating a religious holiday, or meeting family responsibilities, or similar reason. Family Medical Leave Act Large companies are required by law to provide 12 weeks of unpaid leave for extended family situations, such as illness or the birth of a child. While you get no money, your job is held for your return. Smaller employers are exempt from this requirement

PTO Days Some companies no longer give specific days off for vacation, illness, or personal days. All time off is called PTO (Paid Time Off) You will be told how many PTO days you can take each year. You use these days for whatever reason you want – vacation, illness, caring for a family member, a religious holiday. A recent survey showed that 56% of the companies used a traditional system of vacation days, sick days, and personal days, 41% had changed to a PTO system.

Talk about the Pay “This job pays minimum wage.” “The salary will be $24k per year.” “The gross pay will be $8.00 an hour.” “You will be paid in cash at the end of the job.” “Would you like direct deposit of your paycheck?” “The pay period here is every 2 weeks.” “This job has low pay, but really good benefits.”   Has anyone heard comments like this in an interview? Or when someone tells you about a job?

Getting Paid Minimum Wage Gross Pay and Net Pay Payment Method Pay Periods

Minimum Wage The Federal Minimum Wage is currently $7.25 per hour. States and cities can increase this number. In Washington State, the minimum wage is $9.47, but in some places, the minimum wage can be as high as $15.00 per hour Not all workers are covered by Minimum Wage laws. Federal minimum wage laws apply only to larger businesses that do business across state lines, and also to most hospitals and schools. Teens who are 14 & 15 years old may be paid 85% of the minimum wage. Certain very small businesses are not covered Certain types of work (casual baby sitters, companions) are not covered. Certain types of workers have different requirements. Workers who are tipped. Agricultural workers, garment workers, hospitality industry workers, fishermen, newspaper delivery people, etc. Question – Have you every worked at a job that paid the official ‘minimum wage’? Have you ever worked for less than minimum wage? Has anyone worked at a job that paid nothing, just tips? 18 18

Gross Pay & Net Pay Gross Pay is the total amount you have earned. Net Pay is what you actually receive; it is your gross pay minus any amounts that have been withheld, such as: Taxes Union Dues Health Insurance QUESTIONS: - Has anyone here received a paycheck that was lower than what you expected because of these kinds of deductions? Has anyone heard the business expression “Net, Net”? What do you think it means?

Payment Method Direct Deposit – your pay is deposited directly into your bank account by your employer. Check – your pay is given to you in a check. Cash – your pay is given to you in cash. Questions – Who has been paid in cash? Who has been paid with a check? Who has been paid with direct deposit? Direct Deposit Deposit your pay directly into your bank account. The company asks for information about your bank account number, so that your pay can be deposited. Instead of a check, you are given a ‘Payment advice’ – this looks like a pay check, but it is just the information about the amount that was deposited into your account. It will list the gross amount of your pay, any amounts deducted for tax withholding or benefits, and the net amount. Check Receive a check from the person or company that you are working for. The check may be mailed to you, or you might be given the check by a person at work. For an employee , the gross amount, the amounts that have been deducted, and the net amount will be written somewhere on the check. For a free-lancer, the check will be for the full ‘gross pay’ amount. Check Cashing Stores A store that offers check cashing. Check cashing stores charge you a small fee for cashing your check. These stores usually cash government checks, but they may also cash a pay check from a big employer. The fee might not seem like a lot, but you should try to find an alternative. One alternative is to ask at your workplace. Often they will have an arrangement with the bank that they use to write their pay checks, and you can go there with your work ID, and that bank will cash your pay check at no charge. Cash Sometimes you will be paid in cash. If you are an employee, cash payments may be presented in a ‘pay envelope’ which has your gross pay amount, the amount of any deductions, and your net pay written on the outside of the envelope. If you are a casual worker, like a babysitter, your whole pay is likely to be just handed to you in cash.

Pay Periods Weekly Every 2 Weeks Twice a Month Monthly Daily/End of Project Pay Periods The ‘pay period’ is the regular time that you will receive your pay. Weekly Every week, on the same day. Many employers pay on Thu or Fri. Divide the annual pay amount by 52 to determine your gross pay for each pay period. annual pay is $25,000 a year, divide 25,000 by 52 to determine that your gross pay will be $480.77 each pay period. Every 2 Weeks Every two weeks. This is a common pay schedule for large companies. Divide the annual amount by 26 to determine your gross pay for each pay period. Annual pay is $25,000 a year, divide 25,000 by 26 to determine that your gross pay will be $961.54 each pay period. Twice a month Twice a month. Usually payment is made on the 1st and 15th of the month, or the next business day after those dates. Divide the annual amount by 24 to determine your gross pay for each pay period. Annual pay is $25,000 a year, divide 25,000 by 24 to determine that your gross pay will be $1,041.67 each pay period. Monthly Once a month. Usually payment is made on the 1st of the month, or the next business day after. Divide the annual amount by 12 to determine your gross pay for each pay period. Annual pay is $25,000 a year, divide 25,000 by 12 to determine that your gross pay will be $2,083.33 each pay period. Daily/End of Project End of each day’s work, or at the end of the project. A daily payment is usually made in cash, but might be a check. This kind of pay period is often used if you are being paid an hourly rate with a different number of hours each time you work. It is also often used if you are a casual, free-lance worker, such as a baby sitter, house cleaner, or gardener.

Benefits Benefits are valuable things that you get from your employer in addition to the money that is your salary. Health Insurance Life Insurance Disability Insurance Workers Compensation Retirement Savings Contributions Other Benefits Benefits Benefits are valuable things that you get from your employer in addition to the money that is your salary. If you work for a large company, there will be a department call Human Resources (or HR) which can provide information on the benefits that you will get.

Health Insurance Health Insurance Health Insurance rules are changing Most employers offer health insurance If it is offered, you may be required to pay some or all of the costs Many people hope to get a job that includes a health insurance benefit Health Insurance Your employer may pay all the cost, or he may pay only part of the cost, and the rest of the cost of the health insurance will be paid by you. Many people hope to get a job with a health insurance benefit, but remember that this benefit may reduce the salary that you receive, and you may be able to get health insurance on your own through an organization that you belong to, such as a union or club.   23 23

Life Insurance Life Insurance Typically an employer will offer a life insurance policy for the amount of your annual salary Additional multiples of your annual salary might be available at extra cost to you  Life Insurance Your employer may pay all the cost, or part of the cost. Usually - a life insurance policy in an amount equal to the amount of your annual salary is paid for by your employer, with multiples of your annual salary if you pay the extra cost. 24 24

Disability Insurance Disability Insurance Provides some income to you if you are injured so badly that you cannot work. Social Security also provides some insurance against disability. Disability Insurance Provides some income to you in case you are very sick or become disabled and cannot work. Social Security also provides disability payments if you cannot work. 25 25

Workers Compensation Workers Compensation. A kind of insurance that covers you if you cannot work because of an injury that happened at work. Workers Compensation Covers disability that is a result of workplace injuries. The cost of this benefit is completely paid for by your employer. 26 26

Retirement Savings Contributions US tax laws say what percent of your salary can be put into tax-free retirement savings. Cannot take out this money until age 59 ½ Early withdrawal is taxable Early withdrawal has penalties 401k IRA Retirement Savings Employer Matching Plans Retirement Savings (401k plans, IRA accounts) The Internal Revenue Service (IRS) has rules that determine what percentage of your salary you can put away in retirement plans without paying income tax on that money. In most cases, you can’t take money out of your retirement account until you are 59 ½ years old. Early withdrawal – income tax plus penalty So, you should be sure that you won’t need this money right away. A 401k plan is the most common type. IRA - if your employer doesn’t offer a 401k plan, you can open your own IRA. Retirement Savings Employer Matching Plans Your employer may offer to ‘match’ some part of what you put in your 401k. 27 27

Other Benefits Other Benefits Room & Board Meals Free Apartment There may be other benefits that are unique to a particular workplace. For example, workers at a logging camp, may be given meals and a bed in a dorm. A busboy in a restaurant may be given free meals. A building superintendent is often given an apartment. QUESTIONS – have you ever received a benefit like this? 28 28

Talk about Taxes “Taxes will be deducted from your pay.” “Please fill out this W-4 form, and list your dependants.” “You will be responsible for your own taxes.” “We will send out your W-2 form some time in the middle of February.” Question - Has anyone heard these kinds of comments when they started work at a new place? What are taxes? A tax is money that the government takes in order to do its work. This tax money is raised in different ways. Sales Tax – each time you buy something, a percent of the sale is added on to the price you pay. The seller then sends this ‘sales tax’ money to the government. This is thought to be fair because it takes money from people based on what they can spend – so that people with more money to spend will pay more tax. Property Tax – cities or counties charge land owners a percent of the value of their property as an annual ‘property tax’. This is thought to be fair because it takes money from people based on what they own – so that people who own more will pay more tax. Income Tax – the government takes part of what each person earns. This is thought to be fair because it takes money from people based on what they earn – people with a higher salary pay more tax.   Getting the job to provide that income is not easy. But once you have written up your resume, applied for a job, and gotten hired, you will need to think about this job. What kind of worker will you be? When are you expected to work? How will you be paid? And what other benefits will you receive?

Your Taxes All US citizens and resident aliens need to pay taxes if they have over a certain amount of income. Types of Taxes (Federal, State, City, Social Security, and Medicare) Tax Periods Tax Withholding Estimated Tax Payments Tax Refunds YOUR TAXES All US citizens and resident aliens must file a tax return if they have over a certain amount of income. But not everyone has enough income to be required to pay taxes. And not all money you receive is taxable income – income you receive because of grants, scholarships, and gifts may not be income that you need to pay taxes on. Whether you need to pay taxes or not depends on many different things. You may not have to pay taxes if your total income for the year was below a certain level. Also there are special rules for people who are not US citizens - international students, international visitors, resident aliens, etc. If you are not a US citizen, check with an accountant or financial advisor for specific rules that apply to you.   Even if you do not owe any taxes, you may want to file a tax return if you had taxes withheld from your wages so that you can get this amount refunded to you, or if you qualify for some benefit, like the Earned Income Tax Credit. In this section, we will discuss types of taxes (Federal, State, City, Social Security, and Medicare), tax periods, tax withholding, estimated tax payments, and tax refunds. QUESTIONS: Has anyone here paid US income taxes?

Types of Taxes on Income Federal State Social Security Medicare

Federal Taxes Federal Taxes Collected by the US government through its tax collection agency, the Internal Revenue Service (the IRS) Federal Taxes The term Federal refers to the government of whole United States Federal taxes are taxes that the US government collects through its tax collection agency, the Internal Revenue Service (IRS). Usually these Federal taxes are income taxes – taxes based on a percentage of what you earn or receive as dividends or interest. 32 32

State Taxes State Taxes State taxes are taxes that each state collects Some states have an income tax, some do not. In addition to income taxes, some states and/or counties collect property taxes which are based on the value of any property that you own. If you rent, your landlord pays the property tax. (But landlords generally charge enough rent to cover the cost of the property tax payment they must pay, and still allow for some profit.) Also, there may be a ‘sales tax’ – a small percentage of the price of your purchases. Washington state has a sales tax of 6.5%, and local municipalities add on additional sales tax, making the total as much as 9.9% in some places. State Taxes State refers to taxes that are owed to the state that you live or work in QUESTIONS: Can you name some states in the United States? State income taxes are taxes that each state collects. Some states have an income tax, and others do not. Some states (New Jersey is one) collect a ‘commuter’ tax. For example, if you work in Jersey City, NJ, you will owe some income tax to the state of New Jersey, even if you actually live in New York City, in Albany, or in Pennsylvania. (In addition to income tax, some states and/or counties collect property and/or school taxes from property owners – these taxes are based on a percentage of the value of the property owned.) 33 33

City Taxes City Taxes - A few large cities collect income taxes For example, New York City collects an income tax for residents Other city taxes Some cities also have additional sales tax on top of what Washington State charges. City Taxes City refers to taxes that are owed to the city that you live or work in A few large cities collect income taxes from residents of that city. Both New York City and Yonkers collect a city income tax. 34 34

Social Security Taxes Social Security Taxes Social Security pays a small pension to older people and people who are disabled To fund Social Security, a 12.4% of all wages, up to a certain amount ($118,500 in 2016) must be paid to Social Security Employers pay half this amount for their employees, and withhold the other half from their employees’ pay Self-employed people must pay the full amount themselves Social Security Contributions Social Security is the program which pays a small pension to older people and people who are disabled. In order to fund the Social Security program, 15.30% of all wages up to a certain amount ($106,800 in 2009) must be paid to Social Security. Employers pay half this amount for their employees, and withhold the other half from their employees’ pay. Self-employed people must pay the full amount themselves. 35 35

Medicare Taxes Medicare Taxes Medicare is the health insurance system for people over 65 To fund Medicare, 2.9% of all wages must be paid to Medicare Employers pay half this amount for their employees, and withhold the other half from their employees’ pay Self-employed people must pay the full amount themselves An additional 0.9% is due on income over $200,000 per year Medicare Contributions Medicare is the health insurance system for people over 65. In order to fund this program, 2.9% of all wages must be paid into the Medicare system. As with Social Security, employers pay half this amount for their employees, and withhold the other half from their employees’ pay. Self-employed people must pay the full amount themselves. 36 36

Tax Periods Annual Tax Period Jan 1 – Dec 31 Tax Due Date – April 15 Annual tax is based on the total amount of money you earned in the previous year (from 1/1 to 12/31) Tax Due Date – April 15 Quarterly Tax Periods First Quarter/Q1 Jan 1 – Mar 30 Second Quarter/Q2 Apr 1 – Jun 30 Third Quarter/Q3 Jul 1 – Sep 30 Fourth Quarter/Q4 Oct 1 – Dec 31 Annual tax that you owe is based on the total amount of money you earned in the previous year – from January 1 through December 31. You are given until April 15 of the next year to calculate the amount that you owe. You can pay your taxes any time between January 1 and April 15. If you pay later than April 15, you may have to pay a penalty – extra money – for paying late. Some of the money that you earn is ‘exempt’ from taxes – you are not taxed on that income. The exempt amounts include a basic amount for yourself, some for each of your dependants (spouse or children or other people that you support), some for special hardships that you might have (being blind or having a lot of doctor & hospital bills to pay), and some is exempt because you have put it in a special retirement savings account. But the rest of your income – the income that is not ‘exempt’ is what you will have to pay tax on. The tax you owe is a percentage (15% for low income people, 28% for middle income people) of your non-exempt income. QUESTIONS: Is everyone familiar with the usual way of abbreviating the months? JAN, FEB, MAR, APR, MAY, JUN, JUL, AUG, SEP, OCT, NOV, DEC.

Tax Withholding for Employees Tax Withholding is a part of your salary that your employer uses to pre-pay your taxes. If you are an employee, your employer will withhold part of your salary and send it to the Federal and State tax authorities. Your employer will ask you to fill out a W-4 form when you start work to help him estimate how much income tax you will owe at the end of the year. The employer then deducts a percentage of that total amount in each paycheck (tax withholding), and sends it to the Federal, State, and City governments. At the end of the year, your employer will send you a W-2 report showing the total you earned and how much was withheld & sent as a pre-payment of your taxes. Tax Withholding If you are an employee (rather than a freelance or contract worker), you will be asked to fill out a W-4 form showing some basic information about yourself. This will provide your employer with information that will help them estimate how much non exempt income you will have, and how much income tax you will owe at the end of the year. The employer then deducts a percentage of that amount in each paycheck, and sends it to the Federal, State, and City governments. In January, you will then receive a form from your employer, called a W-2 form, which will show the total amount of money you earned in the previous year (from January 1 through December 31), and how much tax was withheld and sent to the government.   If all the calculations were correct, you will not owe anything more for your tax bill when it is due on April 15. If, when you prepare your tax return, it shows that too much tax was withheld, you will get a refund. If not enough tax was withheld, you will have to pay the extra amount. QUESTIONS: Has anyone filled out a W-R form? (This would be done at the same time you would fill out the I-9 form that proves that you are eligible to work in the US.) Do you think it is a good idea to say that you have more dependants than you really do, so that less will be deducted from your paycheck? If you did that, what would happen when your taxes are due?

IRS W-4 Tax Withholding If you are an employee (rather than a freelance or contract worker), you will be asked to fill out a W-4 form showing some basic information about yourself. This will provide your employer with information that will help them estimate how much non exempt income you will have, and how much income tax you will owe at the end of the year. The employer then deducts a percentage of that amount in each paycheck, and sends it to the Federal, State, and City governments If all the calculations were correct, you will not owe anything more for your tax bill when it is due on April 15. If, when you prepare your tax return, it shows that too much tax was withheld, you will get a refund. If not enough tax was withheld, you will have to pay the extra amount. QUESTIONS: Has anyone filled out a W-R form? (This would be done at the same time you would fill out the I-9 form that proves that you are eligible to work in the US.) Do you think it is a good idea to say that you have more dependants than you really do, so that less will be deducted from your paycheck? If you did that, what would happen when your taxes are due?

IRS W-2 If you have had tax money withheld from your pay, in January, you will receive a form from your employer, called a W-2 form, which will show the total amount of money you earned in the previous year (from January 1 through December 31), and how much tax was withheld and sent to the government.  

Estimated Tax Payments for Freelancers If you are a freelance worker or a contractor, tax payments are not withheld from your pay. You are expected to estimate what you will owe, and make an estimated tax payment on the 15th of the month at the end of each quarter (exact dates will vary). Estimated Tax Payments If tax payments are not withheld from your pay (if you are a freelance worker or a contractor, and your pay check is the full amount of your gross pay with no deductions), you are expected to estimate what you will owe, and make an estimated tax payment at the end of each quarter (in 2016 - Apr 18, Jun 15, Sep 15, and Jan 17). If you do not make any estimated payments, or if your estimated payments are too low to cover what you owe, you may be required to pay a penalty (an extra amount of money) when you pay your taxes. Question: -What are some good ways to make sure that you set aside enough money from your earnings to pay your estimated tax payments when they are due?

Tax Refunds If you had more tax withheld from your income than you owe, you will get a refund after you file your taxes. Tax Refunds If you had more tax withheld from your income than you owe, you will get a refund after you file your taxes. And often, if you work only part-time, you will be eligible for a refund. This is why it is sometimes a good idea to file a tax return, even if you think you don’t owe any money. QUESTIONS: Do you think it is a good idea to have more withheld from you pay so that you will get a big refund when you file your taxes?

Where to Get Tax Help If you want to know more about taxes in general, you can visit the IRS Understanding Taxes website at www.irs.gov/app/understandingTaxes/index.jsp The IRS (Internal Revenue Service) has a website (www.irs.gov/ ) and offices in most cities where you can get answers to specific questions you have about your Federal income taxes. State tax departments also have websites and phone numbers for questions. (The Washington State Department of Revenue website is www.dor.wa.gov/) Reputable tax preparers, such as tax accountants and companies like H&R Block can prepare your Federal, State, and City tax returns for a fee. QUESTIONS: Has anyone here done their own taxes? Did you use tax software like TurboTax or H&R Block at Home or Tax Actr?

You & Your Money Glossary Contains simple definitions of the most commonly used financial terms. Log on to www.virginiaguilford.com and download the Word document from the “Docs and Links” page. (The PowerPoint presentations used in this class are also available there) Or send your request to vg@virginiaguilford.com 44