Week 01, Class 02
Taxes, Deductions and Pay Types
Earn and manage your money
Earning money in the United States comes with paperwork. Some jobs hand you a W-2, others a 1099, and the difference reaches further than the form: it changes what is withheld, what you owe and how a first paycheck should be read.
Students learn why federal taxes are withheld, what the common paycheck deductions are, and how W-2 employment differs from 1099 independent contracting. Examples are educational and clearly labeled, so students learn concepts rather than filings.
Topics covered
- Why federal taxes are withheld
- Common paycheck deductions
- The basics of FICA
- W-2 employment
- 1099 independent contracting
- Gig work and side income
- What to expect at tax time
The practical activity
Students compare two hypothetical job offers, one W-2 and one 1099, and work out how the pay type changes the documentation and what actually reaches the bank.
The learning outcome
Students can distinguish W-2 employment from 1099 contracting and estimate take-home pay from either.