Principles of Business, Marketing and Finance Income Tax Return Copyright © Texas Education Agency, 2012. All rights reserved.

Need to Know Terms Income Taxes - tax levied by a government directly on income, especially an annual tax on personal income. Filing Status - your tax-filing group based on your marital status Exemption - an amount you may subtract from your income for each person who depends on your income to live Discuss each term with students and consider a vocabulary quiz for better understanding: Filing Status – your tax-filing group based on your marital status Exemption – an amount you may subtract from your income for each person who depends on your income to live Gross Income – all taxable income you receive, including wages, salaries and tips Adjusted Gross Income – gross income less adjustments Itemized Deductions – expenses listed on Schedule A that you can subtract from adjusted gross income to determine taxable income Standard Deduction – a stated amount you can subtract from adjusted gross income if you do not itemize deduction Taxable Income – the amount on which you will pay income tax Tax Credit – an amount subtracted directly from the tax owed Copyright © Texas Education Agency, 2012. All rights reserved.

Need to Know Terms Gross Income - all taxable income you receive, including wages, salaries and tips Adjusted Gross Income - gross income less adjustments Itemized Deductions - expense listed on Schedule A that you can subtract from adjusted gross income to determine taxable income Discuss each term with students and consider a vocabulary quiz for better understanding: Filing Status – your tax-filing group based on your marital status Exemption – an amount you may subtract from your income for each person who depends on your income to live Gross Income – all taxable income you receive, including wages, salaries and tips Adjusted Gross Income – gross income less adjustments Itemized Deductions – expenses listed on Schedule A that you can subtract from adjusted gross income to determine taxable income Standard Deduction – a stated amount you can subtract from adjusted gross income if you do not itemize deduction Taxable Income – the amount on which you will pay income tax Tax Credit – an amount subtracted directly from the tax owed Copyright © Texas Education Agency, 2012. All rights reserved.

Need to Know Terms Standard Deduction - a stated amount you can subtract from adjusted gross income if you do not itemize deduction Taxable Income - the amount on which you will pay income tax Tax Credit - an amount subtracted directly from the tax owed Discuss each term with students and consider a vocabulary quiz for better understanding: Filing Status – your tax-filing group based on your marital status Exemption – an amount you may subtract from your income for each person who depends on your income to live Gross Income – all taxable income you receive, including wages, salaries and tips Adjusted Gross Income – gross income less adjustments Itemized Deductions – expenses listed on Schedule A that you can subtract from adjusted gross income to determine taxable income Standard Deduction – a stated amount you can subtract from adjusted gross income if you do not itemize deduction Taxable Income – the amount on which you will pay income tax Tax Credit – an amount subtracted directly from the tax owed Copyright © Texas Education Agency, 2012. All rights reserved.

Need to Know Terms IRS 1040 Tax From - A 1040 form is the standard Internal Revenue Service (IRS) form that individuals use to file their annual income tax returns. IRS 1040EZ Tax Form - A 1040EZ form is an alternative to the Internal Revenue Service's (IRS) 1040 income tax form and offers a faster and easier way to file taxes, meant for taxpayers with rudimentary tax situations. Discuss each term with students and consider a vocabulary quiz for better understanding: Filing Status – your tax-filing group based on your marital status Exemption – an amount you may subtract from your income for each person who depends on your income to live Gross Income – all taxable income you receive, including wages, salaries and tips Adjusted Gross Income – gross income less adjustments Itemized Deductions – expenses listed on Schedule A that you can subtract from adjusted gross income to determine taxable income Standard Deduction – a stated amount you can subtract from adjusted gross income if you do not itemize deduction Taxable Income – the amount on which you will pay income tax Tax Credit – an amount subtracted directly from the tax owed Copyright © Texas Education Agency, 2012. All rights reserved.

Independent Practice Fill in your personal information on the Form 1040 EZ. Put a Zero (0) on lines 2, 3, 8a, 8b and 11. Put 10,300.00 on line 5. W2 & Tax Table located at www.tchscte.weebly.com under Documents & Examples Use the financial information located on the W-2 & Tax Table to completecremaining required areas on the form (lines 1, 4, 6, 10 & 12) Calculate the tax return based on the formulas provided throughout the 1040 EZ. (line 13a) Sign and date in the SIGN HERE section and turn in completed Form 1040 EZ January 31 has arrived and it is time to begin completing the necessary paperwork to file a tax return. Using the W-2 provided, complete the following steps to file taxes by the federal April 15 deadline. Copyright © Texas Education Agency, 2012. All rights reserved.