1. What Are Taxes
Taxes are required contributions to national and state revenue, levied by the government on personal income and business profits
Added to the cost of some goods, services, and transactions.

2. What is our tax money used for?
Armed Services
Defense
Retirement for Elderly
Roads
Education
Social Programs: Welfare
Bridges
Law Enforcement
Research
Community Development
Interest on National Debt

3. Penalty for Non Payment of Taxes
IRS adds 5% to owed amount each month you don’t pay
Property can be seized to pay tax bill
Jail time

4. State & Federal Income Tax
Progressive Tax: percentage increases as income increases
United States operates on an ongoing payment system
Taxes are immediately paid on income and held for taxpayer
Filing deadline April 15th

5. If taxable income is over
Progressive Tax
If taxable income is over
But not over
The tax is: $0
$7,550
10% of the amount over $0
$30,650
$7,55 plus 15% of the amount over $7,550
$74,200
$4,220 plus 25% of the amount over $74,200
$154,800
$15, plus 28% of the amount over $74,200
$336,550
$37, plus 33% of the amount over $154,800
$336,6550
No limit
$97,653 plus 35% of the amount over $336,550

6. Social Security
The Social Security tax is also called the FICA (Federal Insurance Contributions Act) tax.
Social Security is a Regressive Tax: percentage stays the same for all incomes or may even decrease.
Tax rate is 6.2%
Social Security taxes provide the following benefits for employees and their dependents: • retirement benefits • benefits for the dependents of retired workers • benefits for the disabled and their dependents

7. Medicare
The Medicare tax is used to provide medical benefits for certain individuals when they reach age 65.
Workers, retired workers
spouses of workers
Regressive Tax
Tax rate is 1.45%
Irs.gov
resource slides

8. Other Taxes
Sales Tax
Property Tax
Gasoline Tax
Local/City Tax

9. Tax Costs Calculate the real cost of these items
If a CD costs $15.00 and the tax is 7.5%, what is the final cost?
You and your friends receive a lunch bill for $22.50 before tax is included. The tax in your state is 8%. What is the total cost when the tax is included?
The class trip is going to cost each of the fifty students $ If tax is 5%, what is the total cost for the entire class?
Which would cost more…a pair of earrings priced at $28.00 with a 7% tax, or a set of posters at $29.00 with a 5.5% tax?
$16.13
$24.30
$6,825
The Center for Applied Research in Education 1996
Posters
$.64
resource slides

11. Tax Forms
W-4
I-9
W-2
1040EZ
Utah State Tax Form

12. W4
W-4 determine the % of gross pay which will be withheld for taxes

13. I-9
I_9 Needs 2 forms of identification: drivers license, passport, social security card, or birth certificate

14. W-2 How much money was earned during precious year
How much money was paid in taxes during the previous year

15. Steps to Completing a Form W-4
Print or type legal name on Line 1 and home address directly below the name
Write social security number on Line 2
On Line 3, check the appropriate box to indicate marital status
Enter a zero on Line 5 if not claiming any allowances
Sign name and date the form before giving it to the employer
Keep a copy for personal records

16. 1040 EZ
As a class, walk through the steps of completing the EZ tax form.
Printable from

17. Utah State Tax

18. These simulations provided by the IRS are interactive and basic
These simulations provided by the IRS are interactive and basic. They allow students to apply the concepts they have learned about taxation.
Simulations

19. W4