6.4: Form 1040 - Reporting taxable Income - B2

Financial Algebra Second Edition

Slide 1

6-4: Form 1040—Reporting Taxable Income

The students will be able to:
• Identify important dates within the tax cycle
• Compare tax forms and their purpose
•Identify key facts about taxes and the tax cycle
•Explain who qualifies to be claimed as a dependent for tax purposes
•Determine whether or not a person is required to file taxes
•Identify the different forms needed to prepare their taxes
•Compare different methods of preparing federal and state taxes
•Describe the difference between a flat and progressive tax rate
•Understand the factors that determine whether or not someone has to file a tax return
•Explain what a dependent is and establish if you can be claimed as a dependent by someone else on their tax return

​Learning Goals

Financial Algebra Second Edition

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REFERENCE: Tax Preparation Checklist for Teens
What do you need to file your taxes? Review this handy list of items you will need to fill out the 1040 form. Check off the items you’re confident you will have ready. Take note of any items you’re unsure or have any questions about.

Financial Algebra Second Edition

Tip: The video lists the pros of all three options but only lists cons for paper filing.
You will have to brainstorm cons for the other two options on your own.

1.What are the pros and cons of each method for preparing your taxes?

a. Old-fashioned paper filing:

b. Tax preparation websites:

c. Hiring a tax professional:

2.Which option would you choose to prepare your taxes? Explain why.

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A) To turn in (on paper):
VIDEO: Ways to File Your Taxes Once you’ve gathered everything you’ll need, you have a few different options to choose from in how to prepare and submit your taxes. Watch this video to learn more about the three most commonly used options. Then, answer the questions.

Financial Algebra Second Edition

1. What is the state income tax rate in the state you live?

2.Which states have no income taxes at all?

3. What is the difference between a flat tax rate and progressive tax rate?

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B) To turn in (on paper):
ARTICLE: State Income Tax Rates: What They Are and How They Work
In the previous resources you’ve learned that in addition to federal income taxes, states can also withhold income taxes from your earnings. Review the sections States With No Income Tax, States With Flat Income Tax Rates, and States With Progressive Tax Structures to learn more about how different states handle income taxes. Then, answer the questions.

Financial Algebra Second Edition

1. The four requirements used to determine if you have to file a tax return are listed below. Fill out the information for yourself next to each requirement if you know it. If you don’t know it, write “need more information”.

Age:

Filing Status:

Dependency status (Can someone claim you as a dependent on their tax return?):

Annual Gross Income:

2. Why might it be beneficial to file a tax return even if you don’t meet the requirements to file?

3. True or False: The federal government will reach out to you if you are owed a refund.

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C) To turn in (on paper):
2 Reasons to File Taxes Even if You Don’t Have To
How do you know if you have to file a tax return? Watch this video to learn about the factors that determine if you have to file. Then, answer the questions.

Financial Algebra Second Edition

D) To turn in (on paper):

Reference: Earned vs. Unearned Income

Quizlet: Taxes - Earned vs. Unearned Income
Most people don’t know that there are actually two types of income - earned and unearned - and each is taxed differently! Review this reference slide and then identify which types of income are earned and unearned in the Quizlet. Then, answer the questions.

1. In your own words, explain what the main differences are between earned and unearned income.

2. Do YOU currently have earned or unearned income? Where do you get this money from?

3. What types of earned and unearned income do you think you’ll have in 10 years?

Financial Algebra Second Edition

E) To turn in (on paper):
Teens Help With Taxes
You found out that you have to file a tax return, and maybe you’re feeling a little nervous. Watch this video to see how some teens are becoming tax experts in their communities and proving that filing a tax return doesn’t have to be an intimidating process! Then, answer the question.

1) After watching this video, how do you feel about having to file your own tax return?
Explain.

2) Do you need a certification in order to file your own tax return? Explain.