Slide 1

What Are Taxes Taxes are required contributions to national and state revenue, levied by the government on personal income and business profits Added to the cost of some goods, services, and transactions.

Slide 2

Law Enforcement What is our tax money used for? Armed Services Defense Bridges Roads Education Retirement for Elderly Interest on National Debt Community Development Research Social Programs: Welfare

Slide 3

Penalty for Non Payment of Taxes IRS adds 5% to owed amount each month you dont pay Property can be seized to pay tax bill Jail time

Slide 4

State & Federal Income Tax Progressive Tax: percentage increases as income increases United States operates on an ongoing payment system Taxes are immediately paid on income and held for taxpayer Filing deadline April 15th

Slide 5

Progressive Tax If taxable income is overBut not overThe tax is: $0$7,55010% of the amount over $0 $7,550$30,650$7,55 plus 15% of the amount over $7,550 $30,650$74,200$4,220 plus 25% of the amount over $74,200 $74,200$154,800$15,107.50 plus 28% of the amount over $74,200 $154,800$336,550$37,675.50 plus 33% of the amount over $154,800 $336,6550No limit$97,653 plus 35% of the amount over $336,550

Slide 6

Social Security The Social Security tax is also called the FICA (Federal Insurance Contributions Act) tax.Social Security Social Security is a Regressive Tax: percentage stays the same for all incomes or may even decrease. Tax rate is 6.2% Social Security taxes provide the following benefits for employees and their dependents: retirement benefits benefits for the dependents of retired workers benefits for the disabled and their dependents

Slide 7

Medicare The Medicare tax is used to provide medical benefits for certain individuals when they reach age 65.Medicare tax Workers, retired workers spouses of workers Regressive Tax Tax rate is 1.45%

Slide 8

Other Taxes Property Tax Sales TaxLocal/City Tax Gasoline Tax

Slide 9

Tax Costs Calculate the real cost of these items If a CD costs $15.00 and the tax is 7.5%, what is the final cost? You and your friends receive a lunch bill for $22.50 before tax is included. The tax in your state is 8%. What is the total cost when the tax is included? The class trip is going to cost each of the fifty students $130.00. If tax is 5%, what is the total cost for the entire class? Which would cost morea pair of earrings priced at $28.00 with a 7% tax, or a set of posters at $29.00 with a 5.5% tax? $16.13 $24.30 $6,825 Posters $.64

Slide 10

Slide 11

Tax Forms W-4W-4 I-9I-9 W-2W-2 1040EZ1040EZ Utah State Tax FormUtah State Tax Form

Slide 12

W4 W-4 determine the % of gross pay which will be withheld for taxes

Slide 13

I-9 I_9 Needs 2 forms of identification: drivers license, passport, social security card, or birth certificate

Slide 14

W-2 How much money was earned during precious year How much money was paid in taxes during the previous year

Slide 15

Steps to Completing a Form W-4 Print or type legal name on Line 1 and home address directly below the name Write social security number on Line 2 On Line 3, check the appropriate box to indicate marital status Enter a zero on Line 5 if not claiming any allowances Sign name and date the form before giving it to the employer Keep a copy for personal records

Slide 16

1040 EZ As a class, walk through the steps of completing the 1040 EZ tax form. 1040 EZ Printable from www.irs.gov

Slide 17

Utah State Tax

Slide 18

These simulations provided by the IRS are interactive and basic. They allow students to apply the concepts they have learned about taxation.

Slide 19

W4

Slide 20