Filing a tax return, and Social Security and Medicare taxes

When you start a job in the United States, you fill out a Form W-4, which tells your employer how much federal income tax to withhold from each paycheck. Early each year, your employer sends a Form W-2 showing your total wages and the taxes withheld, and people who do freelance or contract work may receive Form 1099 instead. Using these forms, you file a federal income tax return, usually on Form 1040 and usually by April 15. If more tax was withheld than you owe, you get a refund; if less, you owe the difference. Most filers take the standard deduction, which reduces taxable income, and free filing options are available for many people. Paychecks also show FICA taxes: 6.2 percent of wages for Social Security, up to an annual wage limit ($184,500 in 2026), and 1.45 percent for Medicare with no limit, both matched by the employer. Social Security pays retirement, disability, and survivor benefits, funded mainly by the payroll taxes of people working today, and Medicare provides health insurance mainly for people 65 and older.

This explanation is AI-generated and can occasionally be wrong. 🚩 Report