Math for Life and Food Service

1
Math for Life and Food Service

• Chapter 11 Objectives
• Earnings Statement
• W-2 Tax Form
• 1040 EZ Tax Form

2
Earning Statements (Paychecks)

• Gross Income - money earned before taxes are
  deducted.
• Net Pay - money earned after taxes are deducted.

3
Earning Statements (Paychecks)

• Wage - payment for labor on an hourly, daily, or
  weekly basis.
• Salary - fixed monthly or yearly compensation.

4
Salary Deductions and Reductions

• Federal Income Tax
• State Income Tax
• FICA Tax (Federal Insurance Contributions Act)
• Social Security
• Medicare
• City Wage Tax
• Tips
• Retirement contributions
• Union dues
• Optional Health Insurance
• Tax Deferred Savings Plan
• Flex Spending Account

5
W-2 IRS Tax Form

• Shows income and taxes paid during the year.
• Each employee must receive this form.

6
W-2 IRS Tax Form

• Box a - The control number for your employer.
• Box b - The employer's identification number
  (EIN).
• Box c - The employer's name, address and ZIP
  code.
• Box d - Your social security number.
• Box e - Your name.
• Box f - Your home address and ZIP code.
• Verify all information and correct if necessary.
  You don't want your refund sent to a different
  address!

7
W-2 IRS Tax Form

• Box 1 - Wages, tips, other compensation. This can
  include back pay, bonuses, commissions,
  severance/dismissal, vacation pay.
• Box 2 - Federal income tax withheld from your
  salary.
• Box 3 - The total in wages that were subject to
  the social security tax. Wages not subject to
  social security tax might include some retirement
  plan contributions.
• Box 4 - Social security tax withheld from your
  salary (6.2).

8
W-2 IRS Tax Form

• Box 5 - Total of your wages that are subject to
  Medicare tax.
• Box 6 - Total you paid in Medicare tax already.
  Medicare tax is 1.45 (2.9 if you are
  self-employed).
• Box 7 - Total amount in tips you reported to your
  employer. This amount is already included in Box
  1.
• Box 8 - Total in allocated tips. When all the
  servers at a restaurant do not report enough tips
  to equal a certain percentage (8) of the sales
  of the restaurant, the restaurant is required to
  allocate to each server an amount of tips it is
  presumed you received.

9
1040 EZ Tax Form

• Label Section
• Name
• Address
• Social Security Number 123-45-6789
• This is not a joint return.
• Elect not to donate money to the Presidential
  Election Campaign

10
1040 EZ Tax Form

• Income Section
• 1 - Total wages, salaries, and tips 17,586.95
• 2 - Taxable interest 50.72
• 3 - No unemployment compensation
• 5 - You are single and no one else may claim you
  on their return.

11

• 1040 EZ - Payments
• and Tax Section
• 7 - Tax withheld
• 3,025.00
• 8 - Do not qualify for
• earned income credits.
• Tax Table ?

12
"In this world nothing can be said to be certain,
except death and taxes. - Benjamin Franklin

• For more detailed information
• http//www.taxesindepth.com
• http//www.irs.gov/efile/
• http//www.moneyinstructor.com/
• http//www.ssa.gov/employer/