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Your First Job

At the end of your first week on the job, you get your paycheck only to find out that a chunk of money is gone. Your employer has taken out--or withheld--the taxes you owe. Employers withhold money for federal income taxes, social security taxes, and state and local income taxes in some states and localities.

Taxes are payments of money to the government that provide public goods and services for the community. Some examples of public goods are national defense, street lights, and roads and highways. Public services include welfare programs, sanitation, law enforcement, and education.

When you start a new job, your employer will ask you to provide information on Form W-4, Employee’s Withholding Allowance Certificate. This will help your employer determine how much money to withhold from your wages.

By January 31 of each year, your employer (even if you don't work there anymore) will give you an IRS Form W-2, Wage and Tax Statement, showing how much you earned in wages, tips and other compensation from the previous year. It will also show the state and federal taxes, social security, Medicare wages, and tips withheld. You will need this form when you file your tax return.

Page Last Reviewed or Updated: 07-Nov-2013