![Page 1: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/1.jpg)
Chapter 7Federal Income Tax
“In the world nothing can be said to be certain but death and
taxes.” - Ben Franklin
![Page 2: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/2.jpg)
Types of Taxes
The Govt. raises ________ by taxing U.S citizens and businesses.
______ _______ states that those with high incomes should pay more taxes (ability-to-pay principle).
3 types of taxes
![Page 3: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/3.jpg)
Progressive Taxes Definition:
Example:
![Page 4: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/4.jpg)
Regressive Taxes Definition:
Example:
Excise Taxes-
![Page 5: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/5.jpg)
Proportional Taxes Definition:
Example:
Note:
![Page 6: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/6.jpg)
Uses for tax revenues Local Level
Education Parks and
playgrounds Roads Police Dept. Fire Dept. Health Dept.
National Level Salaries for
Congress National defense Highways Wildlife refuges Welfare Foreign aid
![Page 7: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/7.jpg)
IRS I______ R______ S______ Agency of Dept. of the _________ Main Functions:
![Page 8: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/8.jpg)
The Power to Tax Power to levy taxes rests with ____________
Bills for raising revenue begin in the ________ ___ _________________
The ___________________________studies proposals and makes recommendations to the full House.
Bills must pass a vote in both the House and Senate and then be signed by the _______ before becoming law.
![Page 9: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/9.jpg)
Paying Your Fair Share Tax brackets =
Voluntary compliance –
Taxes are due by _______ Tax evasion -
![Page 10: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/10.jpg)
An IRS Audit Audit –
Taxpayers can represent themselves or have a representative like a lawyer, accountant, or agent
Audits involve confirming __________ ____________.
![Page 11: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/11.jpg)
Filing Status your tax booklet has complete
descriptions of each status and how to qualify.
![Page 12: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/12.jpg)
Exemptions Exemptions -
You are automatically allowed one exemption for yourself.
Exemption amount for 20___ is $_____
![Page 13: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/13.jpg)
Gross Income Gross income -
![Page 14: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/14.jpg)
Other Taxable Income Winnings from
Gambling Bartering
Income Pensions and
Annuities Rental Income Royalties
Estate and Trust Income
Income from the Sale of Property
Employer-reimbursed Tuition
![Page 15: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/15.jpg)
Items NOT Taxable Items that are not taxable and not
part of gross income include:
![Page 16: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/16.jpg)
Finding Final Taxable Income
Gross Income- Adjustments Adjusted Gross Income- Standard Deduction or Itemized
Deductions- Exemptions
Taxable Income
![Page 17: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/17.jpg)
Tax Return Terms Adjustments –
Deductions -
Itemize –
![Page 18: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/18.jpg)
Tax Return Terms Standard Deduction –
Exemptions –
Taxable Income -
Tax Credits –
![Page 19: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/19.jpg)
Preparing to File Forms will be either _____, _____, or ____
If you did not earn enough to file but you had taxes withheld, you need to file to get a return.
You must file by April 15th of the year after you earned income.
![Page 20: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/20.jpg)
Forms 1040EZ (Short Form) -
1040A (Short Form) -
1040 (Long Form) -
![Page 21: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/21.jpg)
To Begin, You Will Need
![Page 22: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/22.jpg)
Filing Electronically 1040EZ and 1040A forms can be filed at
www.irs.gov You can pay any taxes owed
electronically also at this site. If you are owed a refund, filing
electronically will enable a quicker processing of you refund check.
If you file electronically make sure you print a copy of the return.
![Page 23: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/23.jpg)
1040EZ Example #1Georgina B. Bales (SS# 541-33-9892)485 West 11th Ave.Ogden, UT 87667
Georgina is a clerk at a local store. She earned $16,500 last year from her job, plus $200 interest on her savings account. She had $1,016 withheld in federal income tax last year. She is single and no one can claim her as a dependent.
Form 1040EZ
![Page 24: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/24.jpg)
1040EZ Example #2Brian Smith (SS# 354-58-6102)1927 Peach LaneSummerville, CO 97153
Brian is 16 and had a part-time job after school. He is single and his parents claim him as a dependent. Brian earned $2,675 last year from his job. He had no taxable interest. Brian had $257 withheld in taxes.
Form 1040EZ
![Page 25: Chapter 7 Federal Income Tax “In the world nothing can be said to be certain but death and taxes.” - Ben Franklin](https://reader035.vdocuments.us/reader035/viewer/2022062800/56649de85503460f94ae1f5f/html5/thumbnails/25.jpg)
1040EZ Example #3Use your own information (do not include SS#)
You are single and your parents claim you as a dependent. Last year you made $6,542 at your part-time job and had $524 withheld for federal income tax. You earned $46 interest on your savings account.
Form 1040EZ