PFL: Employment and Income Flashcards
Explain the difference between a career and a job
career is a pathway of advancements, made of jobs a job is work done for pay
Give an example of how education and training can affect lifetime income
income rises as education, training, experience, etc. rise higher paying jobs often require post-secondary education and applicable job experience
Compare the costs of post-secondary education with the potential increase in income from a career of choice
cost of Harvard: $60,659 6 years after graduating, Harvard grads make $106 300
Devise a strategy to minimize the costs of postsecondary education
- scholarships and financial aid - live at home and commute - make your own food instead of eating out - buy used textbooks - bike if you can - taking AP or IB courses, and using them as transfer credits - enlist in the military
Identify individuals who could provide positive job references
- teachers - past employers - leaders of organizations you’ve volunteered with - community leaders (achen) avoid - family - friends - people you really don’t know
Analyze how economic and other conditions can affect income and career opportunities and the need for lifelong training and education
- during a recession, you can take a pay cut to keep the job, and for job-searchers, it is very hard to find jobs, as co’s are letting people go - lifelong education and training ensures that any company would be willing to hire you, which can be helpful if you are laid off later in life - seasons affect employment - summer = kid influx - tech: can a machine replace your job?
Discuss how non-income factors such as child-care options, cost of living and work conditions can influence job choice
- people with families may choose a job that is more steady, (9-5) so they can be with their children - you may choose jobs based on location, and how long it would take to commute - good benefits (insurance, child care) may increase interest in a potential job
Describe the risks, costs and rewards of starting a business
risks: fin loss, failure rewards: satisfaction, self-employment costs: no benefits, stressful
Outline the main components of a business plan
- executive summary (like an abstract) 2. description of business 3. product or service 4. management 5. financial requirements
Explain the difference between a wage and a salary
wage = daily basis. overtime = > 8hrs salary = yearly. no overtime
Give examples of sources of income other than a wage or salary
tips = $ from customers to service sector workers dividends from stocks money earned from other investments inheritance gifts lottery money a business (money earned as profit)
Explain the difference between earned and unearned income and give an example of each
earned income = commissions, rent unearned income = interest, dividends, profit
Give an example of a situation that qualifies for a government transfer payment
gov transfer payment = welfare, SS, subsidies for certain businesses
Explore how local government services assist people, such as those who are unemployed, elderly, disabled or low-income
- Social Security = pay into (pool) while working, given when in need - Medicare = health insurance for over 65 or young w disabilities - Unemployment benefits - food stamps - welfare - Medicaid = free/low $ medical benefits to low income people without medical insurance
Give examples of employee benefits and explain why they are forms of compensation
- health plans - retirement plans - insurance - paid time off compensation includes salary, direct and indirect rewards and benefits employee is provided with in return for their contribution to the organization
Differentiate between required employer contributions and additional benefits that an employer might offer
- employers must contribute to pension, FICA (federal insurance contributions act), and SS
Calculate the future income needed to maintain a current standard of living
NO ANNUITIES - cmpd interest formula and replace A with FV and P with PV. - simple interest, use FV = PV (1+rt) ANNUITIES -
PV = C * (1-(1+i)^-n))/i
FV = C * (-1+(1+n)^n))/i
Identify typical sources of income in retirement
SS, retirement accounts (like an IRA), pensions, home equity, stocks, annuities (which you can buy like insurance), savings accounts, a part-time job, rent/royalties, or an inheritance
Differentiate between a progressive tax and a regressive tax
progressive tax = rate increases with taxable amount
regressive tax = rate applies equally to all
Illustrate the relationship between income level and income tax liability
- as income rises, so does income tax liability. – deductions, excemptions and tax credits reduce tax liability
Identify common types of payroll deductions
- taxes
- insurance
- donations to charity
- pension
- union dues
Calculate how payroll deductions affect takehome pay
payroll deductions are subtracted from your take-home pay
Summarize Social Security, Medicare and Affordable Care Act benefits
SS: gives monetary assistance to retirees, disabled people, and families of retired, disabled, or deceased workers
Medicare: health insurance for over 65 or young w disabilities
Affordable care act: Obamacare, attempts to reform healthcare system by providing americans with affordable health insurance, among other things
Complete IRS form W-4 (Employee’s Withholding Allowance Certificate) to determine the optimal amount to withhold for personal income tax
withholding allowance is declared on form W-4. employers use this to determine how much employees pay to subtract from paycheck for taxes.
List circumstances that make it prudent to adjust the income tax withholding allowance
you can adjust it if you got another job, married, divorced, your spouse got/changed jobs, or if you adopted or had a baby
Differentiate between gross, net and taxable income
gross income is before tax
net income is after tax (net income = income - payroll deductions like FICA, income tax)
taxable income is the base income upon which the system imposes tax. Generally includes some/all types of income, and is reduced by expenses and other deductions
Complete IRS Form 1040EZ, Form 1040 and applicable state income tax forms
IRS is Internal Revenue Service
form 1040EZ is an alternative to 1040, and offer a faster and easier way to file taxes, meant for taxpayers with rudimentary tax situations
form 1040 is an official document that can be used to file income tax return. divided into sections for reporting income and deductions to determine amount of tax you owe or the refund you can expect to recieve
Examine the benefits of participating in employersponsored retirement savings plans and health care savings plans
health insurance: often tax free, less expensive, and covers a broader range
retirement savings plans: automatic savings device, tax breaks, and in some cases, offers free money (with employers matching employee’s contributions)
