The facts on taxes… Who pays the most taxes? The poorest half of the country (155 million people) 2% The richest 10% of Americans (31 million people) 70% People who make between $68,000 and $113,000 a year (100 million people) 15%

Doing Your Taxes!

Filing Your Taxes Key Terms: W-2: the form your employer sends you that shows your total earnings and tax deductions for one year Form 1099-INT: A form which shows interest you have earned from savings accounts 1040EZ – A simple tax form for people with typical income and few special circumstances Most teenagers can use this form

W-2 and 1099-INT

Filing Your Taxes Key Terms: Taxable Income: The amount of your income that the government can tax Not always the same as how much money you made Dependents: someone who is supported by a taxpayer (you are a dependent of your parents most likely)

Filing Your Taxes Key Terms: Tax Deductions: expenses that reduce your taxable income Charity donations Interest on a home loan Some college expenses Standard Deduction: set amount the IRS allows to be deducted without listing the actual expenses $6,100 for 2013 tax year Most common for teens Itemized Deduction: a list of all of your deductions If you claim itemized deductions, you cannot claim the standard deduction Not worth doing unless it will be more than the standard deduction

TAX TABLE

Filing Your Taxes Key Terms: Tax credit: an amount that is subtracted from the final tax amount you owe Some college expenses (tuition) Child tax credit

Tax Deduction vs. Tax Credit Lowers your taxable income Total income = $4000 College expense deduction= $50 Taxable income = $3950 10% tax = $395 Gets taken out of the total tax amount you owe Total income = $4000 10% tax = $400 College tuition tax credit = $50 New tax amount = $350

Filing Your Taxes Key Terms: Tax refund: how much money the government owes you because you paid too much in taxes

Quick Review What is the name of the form that shows how much you earned and how many taxes you paid in one year? What two things help to lower how much you pay in taxes? What do we call the amount that the government gives back to you because you paid too much in taxes? W-2 Tax Deductions & Tax Credits Tax Refund