2.  A: Make a budget: A budget makes sure you have enough money to spend and save. A budget allows you to see where your money is being spent and it helps you make sure your income matches your expenses. ◦ Income: The money you make from a job, or investments i.e. dividends, bonuses, capital gains, interest on savings. ◦ Expenses: Money paid out of your income.  Fixed expenses: tend to be the same each month. Ex: Rent or mortgage.  Variable expenses: tend to fluctuate each month. Ex: clothing, groceries.

3.  A: Credit cards: are forms of payment on credit. You buy something now and pay for it later. Managed properly, credit cards offer us convenience, a sense of security, and allow us to build a healthy credit history. Irresponsible credit card use can result in excessive debt and become a long-term financial liability.  B: Debit Cards: resemble a credit card but is linked to a checking or savings account. Funds are withdrawn immediately from the linked account with each purchase. Debit card transactions are debits.  C: Credit Card Fees : Credit cards charge fees for their usage. ◦ 1. Annual Fee: ◦ 2. Annual Percentage Rate (APR): ◦ 3. Finance Charge: ◦ 4. Late Fee: ◦ 5. Minimum Monthly Payment: ◦ 6. Monthly Periodic Rate: ◦ 7. Transaction Fee:

4.  Interested in finding out more?  Visit the following website or do your own research to learn about these credit card charges.  http://creditcards.lovetoknow.com/What_Is_ APR http://creditcards.lovetoknow.com/What_Is_ APR

5. A:Types of Taxes off income. 1. Estate Tax: tax paid on inheritance from relative or individual. 2. Income Tax: tax paid on salary from job. 3. Capital Gains Tax: tax on the gains (money made over and above the original selling price) made from selling stocks, land, or other investments.

6. B: Tax Credits: Tax credits reduce the amount of taxes you are liable for. Two types of tax credits- nonrefundable and refundable. 1. The Child and Dependent Care Credit is a nonrefundable tax credit based on expenses incurred for the care of a qualifying person. nonrefundable tax credit 2. The American Opportunity Credit is worth up to $2,500 per student for four years of post-secondary education. The credit is 40% refundable, up to $1,000, so it can benefit even those with no tax liability. 3. The Lifetime Learning Credit provides a maximum non-refundable tax credit of $2,000 per year for all students attending an eligible educational institution in your household. The Lifetime Learning Credit may be limited by your income and amount of tax.

7.  C: Refundable tax credits : A refundable tax credit is a tax credit that can reduce your tax liability below zero (0). Because it is possible to receive a refund from this type of credit, they're referred to as refundable. Examples. ◦ 1. The Earned Income Tax Credit (EIC) is a refundable tax credit that reduces or eliminates the tax paid by low-income workers.refundable tax credit  D: Tax Deductions : Tax deductions are expenses that reduce the amount of income subject to tax.  There are two types of deductions most taxpayers will qualify for:  Standard: Standard  Itemized Itemized  The Standard deduction: ◦ The standard deduction is a fixed dollar amount based on your filing status.standard deductionfiling status

8.  Itemized deductions include: ◦ Miscellaneous itemized deductions Miscellaneous itemized deductions ◦ Archer medical savings accounts (MSAs) Archer medical savings accounts (MSAs) ◦ Casualty and theft losses Casualty and theft losses ◦ Charitable contributions Charitable contributions ◦ Deductible taxes Deductible taxes ◦ Health savings account (HSAs) Health savings account (HSAs) ◦ Interest expenses Interest expenses ◦ Medical and dental expenses Medical and dental expenses ◦ Mortgage points Mortgage points ◦ Employee business expenses Employee business expenses ◦ Student loan interest Student loan interest

9.  A: The 1040 is the form a taxpayer fills out to file for a tax refund or to pay taxes. If you have paid too much to the government you will receive a tax refund. If you have paid too little then you owe money to the federal or state government.  B: Recommended records to file taxes:  Preparing your tax return will be easier if the records you need are organized and readily available:  Proof of identification  Social Security numbers for you, your spouse, and dependents  Birth dates for you, your spouse, and dependents  Wages and earnings statements: Forms W-2, W-2G, 1099-R, etc. These forms come from employers, investment firms, etc.  Interest and dividends statements from banks, brokerages, etc.  A copy of last year's tax return  Bank routing and account numbers  The amount you paid for childcare and the childcare provider's tax identification number  Receipts for charitable donations

10.  Go to the following website http://www.1040.com/federal- taxes/filing-basics/http://www.1040.com/federal- taxes/filing-basics/ Read Tax Return Filing Basics. Answer the following question and discuss with a partner.  1. What are the two ways to file a tax return?  2. What can you do if you cannot afford to hire someone to do it for you?  3. What form of identification do you need to claim your spouse and children?

11.  Look on page 550-551 of your textbook and make a budget using the dollar amounts given.  1.Fill in a budget spreadsheet (create one in your notes).  2. Answer all 4 questions under Analyzing economics.

12.  Take a look on page 526 of your textbook.  Analyze the chart.  1. What are the median incomes for men and women who are employed full time?  2. What is the difference in median income between female high school graduates and females who attain bachelor’s degrees?  3. Is the unemployment rate greater for worker’s with only a high school diploma? Why?  4. What is underemployment? How is it different from unemployment?