Bellwork KWL List any 4 things you KNOW about taxes List 4 things you would like to LEARN about taxes List 1 item you LEARNED about taxes that you didn’t know (listen to your classmates on #1!)

On the back of your pay stub : 1 On the back of your pay stub : 1.Write how much money you want to be earning (per year) when you are 30. 2. What percentage do you think that income has to pay to the government in taxes (in the US)

What about taxes? Let’s watch a short video on taxes- be sure to answer the 5 questions I gave you on the back of the pay stub assignment

Taxes in Review EVERYBODY who works MUST pay taxes- even if you own your own business Even if you are collecting unemployment you must pay taxes 4 taxes come out of each paycheck: Social security Medicare Federal State

Where does the money go and come from? Let’s take a look… Debt clock Still not convinced? Let’s see how hard it would be to balance the budget…

Taxation Benjamin Franklin “In this world nothing can be said to be certain, except death and taxes.” Benjamin Franklin

So what’s left? Gross income: How much you earn Net income: how much you keep Net income = gross income - gross income*tax rate For example: Mrs. S-G made (sadly) $39,000 last year. Net income = $39,000 - $39,000(.25) Net income = $39,000 - $9,750 = $29,250 Where does the $9,750 go?

Perspective What is “cost of living” What do you think the average cost of living is for Michigan? What do you think the average cost of living is for the city I live in- Allen Park? Let’s do some more math…

Cost of Living Average cost of living in Michigan 2013- $44,438 Average cost of living in Allen Park (which is the same as Detroit BTW) 2013- $50,561 Cities and states differ in the amount of cost of living. Why do you think that is? Can you think of any examples Answer: Mrs. S-G brings home $29,250 and c.o.l is $50,561  Deficit of $21,311

In reality… US Federal Tax Rates: (only 3 % of Americans make over $250,000) Look at the amount of $ you wrote down earlier… how much would YOU have to pay in taxes? Write this amount (your net pay) under the amount you wrote for your gross pay

Let’s check out the pay stub Time to do some math!

Income Tax in USA IRS – tax collection agency in USA Taxes are deducted throughout year Every citizen must file every year by: If you paid more during the year then you need to: you get a refund If you paid more during the year then you need to: you must pay the difference

Taxes: For Example For example: Mrs. S-G made $39,000 last year. Net income = $39,000 - $39,000(.25) Net income = $39,000 - $9,750 = $29,250 If Mrs. S-G paid $10,375 in 2007, what happens after she files? Why is a BIG refund not such a great idea?

Does the US have a good tax system Does the US have a good tax system? Were any of your #2 bellwork questions not answered?

Income Tax Forms! How does someone calculate how much they are going to pay for income taxes? You can fill out the EZ form or you can do it online (but you have to pay for the online programs) Let’s look at the EZ form.