1. Welcome! Paychecks Money Taxes Workshop designed with you in mind!
Ann Marie Erie Accounting Services Unlimited

2. What paychecks are all about!
Paychecks are an account of your pay period and corresponding earnings.
2080 = Hours in “Full Time” work year
Common Pay Periods:
Weekly:
Paid every Friday
Bi-Weekly:
Paid every 2 weeks on Friday. Can mean 3 paychecks in 1 month
Bi-Monthly:
Paid 1st and 15th of the month.
Paychecks may be smaller than others depending on short months.

3. Pay period delay
Most companies have at least 1 week delay between the pay period and the time the paycheck issued
Management must verify hours worked AFTER employees have finished the pay period
Time to process through payroll
Transaction process time for cutting checks and direct deposit

4. Payday! Direct Deposit Pay Check Cash
Secure & Safe
Money transferred DIRECTLY to your account on payday
Already in account when credit union opens!
Pay stub is electronic or paper
Pay Check
Must manually deposit or cash check
Fees usually associated with check cashing
Cash
No record for calculating benefits (SS)
No “paper trail” for verifying income for loans

5. Employment “Exempt” “Non-Exempt” Not under DOL regulation for overtime
Actually refers to definition of certain class of workers
Certain professions / level of responsibility
Not usually hourly workers
“Non-Exempt”
Federal Fair Labor Standards Act: must be paid for each hour of overtime worked

6. Your Paycheck: The paystub tells all!
Income Categories:
“Gross Income”
The amount you are paid before any deductions or taxes are levied.
“Net Income”
The amount that actually gets deposited into your checking account.
After taxes and deductions.
Voluntary Deductions
Mandatory Deductions
Use this amount to determine your “hourly pay” when you make purchasing decisions.

8. Tax

9. Mandatory Deductions FICA- Federal Insurance Contributions Act
Medicare & OASDI
Medicare/Social Security
Employee pays 6.2% & Employer pays 6.2% (12.4% Total)
Up to a limit of $106,800 annually (then do not have to pay)
Old Age Survivor Disability Insurance (OASDI)
Indirectly tied to the amount you put in through your career
Employee pays 1.45% & Employer pays 1.45 (2.9% Total)
No limit
Federal Income Tax
Based on W-4 tax form (filled out upon hire)
10% – 35% of Gross Income
State Income Tax (Also city/parish as required)
Based on the L-4 tax form (filled out upon hire)
Louisiana: 2%-6% increasing as income increases (no cap)
Some states have no state income tax

10. Voluntary Deductions Deductions directly from your paycheck.
Some can come out “pre-tax” some have to come out “after-tax” or “post-tax”.
Pre-tax deductions can lower your taxable income
After-tax or Post-tax deductions mean that the taxes have already been paid before you “see” the money.
“Voluntary Deduction” Categories:
Health insurance premiums
Life insurance premiums
Retirement contributions (401K)
Employee stock purchasing options
Uniforms, union dues and other specified job-related items

11. Tax Forms W2 Tax Form (from HR’s W4 / L4) 1099 Form
Employer form sent to IRS and you by 1/31.
Details annual salary and withheld tax.
Includes Federal & State taxes withheld.
1099 Form
Employer form stating how much a contract worker was paid for services.
Sent to IRS by employers when reporting income not withheld by the company employing their services.
Usually contract workers
Can also be issued when personal debt is “charged off” or “forgiven”

12. What are “Tax Brackets”?
USA has progressive tax system, the more you make the higher your tax burden
The percentage (%) of tax you pay according on your taxable income as defined by a monetary range.
Brackets describe the range of income eligible to be taxed at a certain rate.
2014 Tax Year Brackets
10% $0 -$9,075
15% $9, $36,900
25% $36, $89,350
28% $89, $186,350
33% $186,351 - $405,100
35% $405, $406,750
39% < $406,751

13. Internal Revenue Service: IRS
IRS handles federal taxes
File tax returns each year
File even if you don’t think you “have made enough money”
May get some back!
Tax return acts as proof of annual income
Think of issues fishermen had with oil spill claims
Usually due April 15th
Forms include 1040, 1040EZ , 1040A
If the deductions you claimed on your W4 aren’t supported with proof, you will owe the government money!

14. Can you afford yourself?
Automatic personal financial calculator
Enter your life choices and it will tell you how much money you need to earn
Free and fun

15. Thank You! ?? Questions ?? Congratulations!
Paychecks, Money and Tax section complete!
Thank You!
Ann Marie Erie
Accounting Services Unlimited