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Americans get an ‘F’ on income tax quiz?


Some people who I talk to don’t know how taxes even work. When talking to them, they don’t understand that if they withhold $5000 from their paycheck over the year, and then they get a $1000 refund at tax time, they think they government paid them.  What you ended up doing is giving the government a $1000 loan that they paid 0% interest to you for.

If you withheld $3000 over the year, you would have owed $1000 to make it $4000.

To make the point again: you are going to pay the $4000 no matter what what you withheld from your paychecks over the year.

The withholding amount is set by how you fill out your W-4.

Take this 10-question tax quiz and see how you do.

Source: Americans get an ‘F’ on income tax quiz – MarketWatch