15 income earning and reporting

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15 income earning and reporting

  1. 1.  Personal choices about investment in oneself as human capital through education, training, and skill development impact earnings.
  2. 2.  Knowledge and skills a person possesses
  3. 3.  People invest in their own human capital when they gain knowledge and skills through education, training, and experience
  4. 4.  People with more education and skills tend to earn higher incomes than uneducated and unskilled workers.
  5. 5.  People can receive income from a variety of sources
  6. 6. Earned: Unearned: Salary  Interest Hourly wages  Return on investment Overtime  Inheritance Tips  gifts Commissions Bonuses Piece rate
  7. 7.  Net pay is what remains after voluntary and required deductions are subtracted from gross pay
  8. 8.  Total money earned before deductions Some deductions are required Some may be voluntary
  9. 9. Net pay results when deductions such as the following are subtracted from gross pay: Federal Insurance Contributions Act (FICA) contributions State and Federal Taxes Insurance Savings Retirement Medical reimbursement (pre-tax deduction) Child care reimbursement
  10. 10.  Employees may have a variety of benefits and incentives to consider
  11. 11.  Benefits are part of an employee’s compensation, over and above wages or salary. They add to the financial value of the job Examples of benefits: › Matching contributions to tax-sheltered annuities, such as 401(k) and 403(b) retirment savings plans › Savings plans › Parking › Health insurance plans (medical, dental) › Child care › Elder care › Paid vacation › Paid sick days › Profit sharing
  12. 12.  Incentives are offered as motivation for employees to perform well and may include: › Bonuses › Profit sharing › Free travel or merchandise
  13. 13.  The information a worker provides on the W-4 form impacts federal tax deductions and personal income
  14. 14.  The information provided on the W-4 form determines how much is withheld from one’s gross pay.

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