1. Taxes
1040

2. Individuals Must File Tax Returns By:
Single Individuals Must File Tax Returns If:
Your Total Income is $10,300 (this amount changes & is the standard deduction {6,300} + 1 exemption {4,000}) or more ($6,300 earned income if you are a dependent)
Earned Income
Unearned Income
Individuals Must File Tax Returns By:
April 15th unless that date falls on a weekend or holiday
Individuals Must File Federal Tax Returns Using:
1040 EZ OR 1040 A OR 1040

3. Earned Income is Taxable & Includes:
Earned Income is Generally
Shown on a Form
W-2 Or
1099-MISC
Wages or salaries
Commissions
Tips
Fringe benefits and stock options
Paid Sick, Holiday & Vacation Days
Bonuses
Health & Life Insurance
Retirement Contributions
Workman’s Compensation

4. Unearned Income is Taxable & Includes:
Interest from a Savings Account
Interest from Bonds
Dividends from Stock
Gains from Selling Investments
Income from Rental Property
Gifts & Inheritance
Prizes
Money from Retirement Fund
Royalties
In-Kind & In-Cash Transfers
1099-INT; 1099-DIV
Nothing
Other 1099 Forms

5. Money Spent/Invested That Lowers a Tax Payers Total Income
Income Adjustments
Money Spent/Invested That Lowers a Tax Payers Total Income
Examples:
Moving Expenses if Related to Your Present Job or Starting a New Job
Retirement Account Investments
Tuition and Fees
Student Loan Interest

6. Adjusted Gross Income (AGI)
Total Income – Income Adjustments

7. Exemptions—Qualifying Child
Who’s a Dependent?
Someone Who Lives with You More Than ½ the Year
&
Under 19, or 24 if student
Did Not Provide Over Half his/her own Support
Is Not Filing a Joint Return unless only for a refund
For Tax Purposes?

8. Exemptions Worth $4,000 for 2015 (this amount changes) For Each:
Tax Payer
Dependent
Over 65
Blind
NOTE:
Exemptions Lower AGI (Adjusted Gross Income)

9. Income is Lowered Also By:
Standard Deduction (amounts change)
$6,300 for Single
$12,400 for Married Filing Jointly OR
Itemized Deductions—Schedule A
NOTE:
Use whichever is Larger

10. Itemized Deductions-Schedule A-Examples
Medical & Dental Expenses (Limited)
Real Estate Taxes Paid
Vehicle Taxes from Registration
Donations of Money or Goods
Safe Deposit Box Fees
Union Dues
Losses Due to Theft, Vandalism, Fire, Storm (Limited)
Cost of Special Tools, Uniforms, or Protective Clothing (Limited)
Business Use of Home (Home Office) (Limited)

11. More Valuable Than Deductions
Tax Credit
Lower Tax Amount
If Tax Amount is Zero, Can Give a Refund
More Valuable Than Deductions
You owe $1,003 in tax. You are eligible for either a $1,000 tax deduction or a $1,000 tax credit. Which would you choose?
Tax Credit

12. Tax Credits are More Valuable Than Deductions-How?
$1000 Deduction—If your Original Income was $9,480, your tax is $1,003
When you deduct the $1000,
$9,480 - $1,000=$8,480 is your new income
Your new tax is $853
so you saved $ $1003-$853=$150

13. Tax Credits are More Valuable Than Deductions-How?
$1,000 Credit—These are taken AFTER you calculate your tax
Your tax on $9,480 is $1003
When you take a $1,000 credit
Your new tax is $ $1,003 - $1,000=$3
Which is a savings of $1,000

14. Tax Credit Examples Child Care Expenses
American Opportunity Credit for College
Children Under 18 Who Live With You
Home Energy Savings
First-Time Homebuyer
Lower Income Families

15. Federal Taxes Used For:
National Defense (Wars)
Social Security
Medicare/Medicaid
Interest on the National Debt
President , Senators and House Representatives
All White House Workers
Agriculture
Foreign Affairs
Veteran Benefits
Environmental and Natural Resources

16. State & Local Taxes Used For:
Education
Public Transportation
Fire Fighters & Police Officers
Road & Traffic Light Repair
Capitol & Government Building Maintenance
Congress, Governors, Mayors, State Representatives
All Government Workers
Garbage Collecting
Healthy Drinking Water

17. One of Most Controversial Issues For Citizens
How Tax Money is Used
Best Way to Voice Opinion
Vote

18. Federal Income Tax History
Created in 1913
16th Amendment Gave Congress the Power to Tax

19. Income Tax Fun Fact
In 1916, Congress changed the text of the income tax law, removing the word "lawful" from "lawful business"
Now ALL income, whether attained by legal means or not, was taxable.
Because of this, many criminals who were guilty of other infractions were sent to prison for tax evasion.

20. Types of Taxes Income Payroll Sales Real Estate Personal Property
Unemployment State & Federal
½ of Medicare & Social Security
Sales
Real Estate
Personal Property

21. Tax Preparation or Help
Certified Public Accountant (CPA)
H & R Block
IRS
Tax Programs
If you have a professional complete taxes, make sure they sign off on the return.
If they make a mistake, the will at least cover your penalty and interest.

22. Why Do You Have a Social Security #
Social Security Administration keeps track of your earnings to determine benefits you will get when retire, become disabled, or die and survivors get.
IRS uses it to identify you