Lesson 03 of 07
Paychecks and taxes
Taxes feel like an April problem. They are not. They come out of every paycheck all year, and the number on your first-day paperwork decided how much.
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The short version
- Withholding is a guess. The W-4 you fill in at a new job tells your employer how much to send to the government each paycheck. Guess too low and April is a bill.
- A refund is your own money. It means too much was withheld. A $2,000 refund is a $2,000 loan you made to the government at 0% interest.
- Two forms, two situations. A W-2 comes from an employer who withheld for you. A 1099 means you were a contractor, nobody withheld anything, and you owe it in April.
- April is a deadline, not a start. Filing takes an hour if your forms live in one folder. Free filing covers most simple returns, and an extension moves the paperwork, not the payment.
Check your withholding once a year, not once a decade. Five minutes with one paycheck changes what April feels like.
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Six questions on the video.
Watch first, then take the quiz on its own page. Four right is a pass, and your best score is kept in this browser.
After this: Lesson 04, College finance