Personal Financial Literacy: Types of Taxes

Personal Financial Literacy

Taxes, Incomes and Budgets, OH MY!

Objectives

5.10A: Define income tax, payroll tax, sales tax and property tax

Open Ended

Have you heard the word taxes before? Where did you hear about taxes?

Understanding Taxes Notes

Write the definition for each vocabulary term.

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.

Open Ended

What is the difference between income and expenses?

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])

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