5.5 Social Security and Medicare - Classwork

Financial Algebra Second Edition

Slide 2

A) To turn in on paper:

Watch the video: If Paychecks Could Talk to learn more about the withholdings from your paycheck. Some people are surprised when they get their paycheck and the amount of money they receive is lower than they expected. This is often because they don’t know about things like state taxes, federal taxes, and the Federal Insurance Contributions Act (FICA). Then, answer the following questions.

Financial Algebra Second Edition

Slide 3

1.Briefly describe the purpose of taxes.

2.
2.Medicare and Social Security are mandatory spending categories funded by which type of taxes that are withheld from your paycheck?
a. Local
b. State
c. Federal
d. FICA

3.The federal income taxes that are withheld from your paycheck are used to pay for what?
a. Mandatory spending
b. Discretionary spending
c. Unemployment insurance
d. Medicare and Social Security

4.All of the following options are benefits we receive as a result of government spending EXCEPT…
a. Health and retirement benefits for seniors
b. Credit card debt forgiveness
c. National parks maintenance
d. Public school education

Financial Algebra Second Edition

B) If Paychecks Could Talk
Everyone pays taxes, and many people complain about them. But why?

Watch this video to learn where tax revenue comes from and what exactly the government is spending that money on, and to answer the
questions within the EdPuzzle itself.

Financial Algebra Second Edition

C) EDPUZZLE: How to Read a Pay Stub

Now that you understand why some money is taken out of your paycheck, let’s dig a little deeper into how that impacts the amount of money that actually ends up in your bank account. Watch this
video to answer the questions within the EdPuzzle itself.

Financial Algebra Second Edition

D) Your Federal Income Tax Receipt - To turn in on paper.

This interactive calculator allows you to see a “receipt” for your taxes, detailing exactly where your dollars were spent.
Enter your federal income taxes paid for the previous year into the calculator = $8,300 (taxes paid for a salary of $70,784 - the median salary of a U.S. household in 2021).
Then answer the following questions.

1.What’s one category you wish fewer taxes were spent on?
Why?

2. What’s one category you wish more taxes were spent on?
Why?

Financial Algebra Second Edition

E) ACTIVITY: FINE PRINT: Pay Stub (Quiz section on Canvas)

Let’s practice reading and understanding a pay stub so you can really get an idea for what it looks like when money is added or subtracted from your paycheck. Follow the directions on the worksheet to complete this activity online.