1. Your Job & Taxes

2. Starting a New Job To receive a paycheck, an employee must:
Complete a Form W-4
Employee’s Withholding Allowance Certificate
Determines the amount of money withheld for taxes

3. Completing a W-4

4. Form W-4 Allowances
Allowance
May claim an allowance only if no one else claims that person as a dependent
Dependent - person who relies on the taxpayer for financial support
Qualifying child
Qualifying adult relative
Rule of thumb = may (but not required) claim an allowance for every dependent

5. Starting a New Job Complete a Form I-9
Used to prove the identity of people and avoid hiring non United States citizens
Must provide at least 2 of the following
passport
driver’s license
U.S. military card
Social Security card
birth certificate

7. Sample Paycheck Stub Terrific Tacos Employee Paycheck, Patty
SSN/Employee Identification Number
Check # 164
Check Amount (net income)
$146.68
Employee Address 293 Michael Grove Billings, MT
Pay Type- Gross Income
Deductions
Current
Year-to-date
 $180.00
Federal Withholding State Withholding FICA
$14.10 $5.45 $13.77
$ $ $330.48
Totals
$33.32
$757.38
Pay Period 6/11/2007-6/25/2007

8. Taxes Deductions from your Paycheck
Payroll tax – A tax on earned income that supports the Social Security and Medicare programs (also known as FICA)
Income Taxes
Federal
Largest %
State
Payroll Taxes
Social Security
Medicare

9. Income tax Income tax - tax on earned and unearned income
Unearned income - income received from sources other than employment
Earned income -money earned from working for pay
Example: Wages and salaries earned from employment
Example: Interest earned from a savings account

10. What are benefits of being a part of these tax paying communities?
Military for national security ?
Roads
Libraries
Police and fire departments
Public schools
Recreation (parks, trails)

11. “You are better off being in a community than by yourself”
As a community member you receive many benefits you could not pay for individually
Taxes are a way members of a community provide for one another

12. What is Federal Taxes? Purpose Tax charged 10% of earned income
Changes based on your tax bracket
Supports Federal Programs
Military
Education Grants
Disasters
Research
Benefits LINK

13. What is State Tax? Purpose Tax charged
These support State Gov’t. Programs
Head Start
Med Assistance Programs
School Breakfast Pro
NE Unemployment Insur.
NE Benefits LINK
5.5% of earned income
Can changed based on location within the state

14. What is Social Security?
Purpose
Tax charged
Income for:
Retirees
People with profound disability
Children who have lost a parent
A person with children who has experienced the death of a spouse
6.2% of earned income (decreased to 4.2% for )
Up to an annual maximum

15. Purpose Tax charged What is Medicare?
Helps pay for health care for senior citizens
1.45% of earned income
No limit

16. The form that an employer must send to an employee and the IRS at the end of the year. The W-2 form reports an employee's annual wages and the amount of taxes withheld from his or her paycheck.

17. "income tax return for single and joint filers with no dependents"
1040EZ Form
"income tax return for single and joint filers with no dependents"
"easy form"
An alternative to the Internal Revenue Service's (IRS) 1040 income tax form
offers a faster and easier way to file taxes
Meant for taxpayers with very basic tax situations
Usually the first tax form filled out

18. 1040EZ cont.
In order to be eligible to use this form the individual must have
a taxable income of less than $100,000
interest income of $1,500 or less
possess no dependents
no real estate assets
no tax shelters
no foreign income