Personal Financial Literacy

Understanding Taxes Notes

Write the definition for each vocabulary term.

Personal Financial Literacy

Taxes, Incomes and Budgets, OH MY!

Income v Expenses

• Income: Money earned ( +$ )

• Expenses: Money Spent ( -$ )

Employee v Employer

• Employee: a person hired to provide services for a company on a regular basis to earn an income.

• Employer: The Boss. The person (or firm) who hires the service of employees to complete a job.

Income Tax

Tax based on money a person earns (salaries, wages, tips, etc.) and is used by the Federal Government for National Expenses.

(soldiers, safety, courts, law makers, national parks, IRS [Internal Revenue Services])

Multiple Choice

Something that you pay is called....

• income

• an expense

• a profit

• savings

Multiple Choice

Alyssa has her first job at the local bakery. After working for one week, she received her first paycheck. The total amount of money she is able to put in the bank is $75.62. What type of income does this amount describe?

• Gross Income
• Net Income
• Both Gross and Net Income
• None of the above

Multiple Choice

Amanda has to pay taxes on her annual salary and investments. Which type of tax is Kimberly paying? 

• Sales Tax
• Property Tax
• Payroll Tac
• Income Tax

Multiple Choice

Money you receive before taxes is called:

• gross income
• net income
• pay day
• bank loan

Multiple Choice

When you own a house, what type of tax do you pay on it?

• income tax
• sales tax
• property tax
• payroll tax

Multiple Choice

What type of tax do you pay for Cheetos and soda?

• income tax
• sales tax
• property tax
• payroll tax

Multiple Choice

Which type of tax is taken directly out of your paycheck?

• payroll tax
• income tax
• paycheck tax
• sales tax

Multiple Choice

Which type of tax do you pay once a year on any money you've earned (job, lottery, etc)?

• payroll tax
• income tax
• sales tax
• property tax

Multiple Choice

Money that you spend, share, or save.

• expense

• income

• cash

• budget

Multiple Choice

A spending or savings plan.

• budget

• payroll taxes

• balanced budget

• expense

Multiple Choice

When what you make, spend, and save all balance out to $0. Income=Expenses

• budget

• income

• gross income

• balanced budget

Multiple Choice

Money you receive after taxes is called:

• gross income
• net income
• salary
• pay day

Multiple Choice

Money you receive before taxes is called:

• gross income
• net income
• pay day
• bank loan

Multiple Choice

When you own a house, what type of tax do you pay on it?

• income tax
• sales tax
• property tax
• payroll tax

Multiple Choice

What type of tax do you pay for Cheetos and soda?

• income tax
• sales tax
• property tax
• payroll tax

Multiple Choice

Which type of tax is taken directly out of your paycheck?

• payroll tax
• income tax
• paycheck tax
• sales tax

Multiple Choice

Which type of tax do you pay once a year on any money you've earned (job, lottery, etc)?

• payroll tax
• income tax
• sales tax
• property tax

Multiple Choice

Which of the following is considered a "need" when budgeting?

• money for eating out
• money for going to the movies
• money to pay for your house
• money for your dog's toys

Multiple Choice

What is a machine that allows bank customers to deposit or withdraw money without visiting their bank?

• ATM (automated teller machine)
• credit card
• safe deposit box
• coffee can under your bed

Multiple Choice

Jan babysits for money. She is paid $7 each time. She saves all of the money she makes. If Jan wants to save $35, how many times does she need to babysit?

• 7 times

• 28 times

• 5 times

Multiple Choice

Billy received $6 each week for him allowance. He saves $4 each week and only spends $2. How much money will Billy have saved in 5 weeks?

• $20

• $12

• $10

Multiple Choice

Pam wants to buy a sticker book for $32. She saves $5 each week. Which statement is true?

• She will have enough money if she saves for 5 weeks

• She will have enough money if she saves for 7 weeks

• She will have enough money if she saves for 10 weeks

Multiple Choice

Shelly wants to buy some new shoes, but she doesn't have enough money saved. Which statement describes that best way for Shelly to save enough money to buy the shoes?

• Spend all of her allowance each week on toys and games

• Give her allowance to her brother so he can buy candy

• Save the money her mom gives her for doing her chores each week

Multiple Choice

Which statement describes what happens when you spend money?

• The amount of money you have decreases

• The amount of money you have increases

• The amount of money you have stays the same

Multiple Choice

Which statement does NOT describe a withdrawal from a bank account?

• Using $30 from your savings account to pay for a sweater

• Putting money from your paycheck into your checking account

• Getting money from your account using an ATM

Multiple Choice

To put money aside for future needs or wants.

• spending
• save
• borrow
• give

Multiple Choice

Things that are essential like shelter and food.

• groceries
• things
• wants
• needs

Open Ended

What is the difference between income and expenses?

Payroll Tax

A tax an employer (boss) withholds from an employee's (worker) salary, paid to the government

(Social Security, Healthcare and unemployment)

Sales Tax

A tax paid on the purchase of goods and/or services.

Every time you buy things or services, you pay the sales or transaction tax.

In Texas, our sales tax is 8.25%

Property Tax

A tax based on the value of a property that is paid by the owner of the property.

Homes, Land, Businesses, etc.

Multiple Choice

Ian went to the Academy to purchase a baseball bat. The price tag said $49.99, but when he went to check out, the total was $ 54.11. What type if tax is this an example of?

• Payroll Tax

• Income Tax

• Property Tax

• Sales Tax

Multiple Choice

Which type of tax best describes this definition?

- a tax paid on the money an employee receives.

• Payroll Tax

• Income Tax

• Property Tax

• Sales Tax

Multiple Choice

The following are examples of which type of tax?

1. Tax paid on a family owned farm.

2. Tax paid of a piece of land someone owns.

3. Tax paid on a home someone owns.

• Payroll Tax

• Income Tax

• Property Tax

• Sales Tax

Multiple Choice

Which type of tax best describes this definition?

- a tax includes Social Security and Medicare taxes and is paid by an employer

• Payroll Tax

• Income Tax

• Property Tax

• Sales Tax

Payroll Tax: Social Security

Social Security- a federal program that provides assistance to persons faced with unemployment, disability, or to qualifying people over the age of 65.

Payroll Tax: Medicare

Medicare- a federal program that reimburses hospitals and physicians for medical care provided to qualifying people over 65 years old.