Intro to Taxes

10.1 Where Does My Tax Money Go

Finite Math

EQ: Monday, March 4, 2024

● Who pays taxes?

● Who gets your tax dollars?

● What are the different kinds of taxes?

Multiple Select

Taxes are compulsory contributions to the government on

• Workers' Income

• Business Profits

• Added to the cost of some goods, services, and transactions.

Compulsory contribution to the government on workers' income and business profits, or added to the cost of some goods, services, and transactions.

Taxes

Multiple Select

When are taxes collected?

• When you get paid.

• When you spend money.

• When you give money away.

• When money is used.

When are taxes collected?

The government sees the use of money
as an opportunity to take a portion of it.

Match

Match the most common kinds of taxes.

• Income Tax

• Sales Tax

• Property Tax

• Capital Gains Tax

Tax on money you earn.

Tax collected when goods are purchased.

Tax on things you own.

Tax on profits of investments, stocks.

• Tax on money you earn.

• Tax collected when goods are purchased.

• Tax on things you own.

• Tax on profits of investments, stocks.

imposed
as a fee

Income Tax

Tax levied by the government on annual income.

Multiple Select

What is considered Income Tax

• Wages and Salary

• Tips

• Profit from hobbies.

• Gambling Winnings

• Inheritance

Who Pays

Who Gets

Income Tax

Those who work

Federal Government (1040)
State Government (540)

Interesting Facts
What is considered income?

Wages
Tips (as a service worker)
Hobbies - a toy maker who sells is work
Gambling Winnings

Multiple Select

Who collects income tax?

• Your employer

• The Federal Government

• The Local or State Government

Sales Tax (Consumer Tax)

Tax on sale of certain goods and services.

Multiple Select

Which of the following does NOT have sales tax?

• Carbonated water

• Orange Juice

• Canned Tuna

• Tuna Sandwich at The Habit

• Canned Tuna for Cats

Sales Tax (Consumer Tax)

Who Pays

Who Gets

Those buy

Local (City) and State Government

Interesting Facts
What is taxed?

Sales tax is sometimes called the Luxury Tax.
Buying chicken (groceries) to eat is not a luxury - Not Taxable.
Buying chicken to feed your dog (dog food) is a luxury - Taxable!

Multiple Select

Who gets sales tax?

• The store where you buy the merchandise.

• The Federal Government

• The State Government

• The Local City Government

What is the difference in your tax liability whether you have a steak dinner at Outback or at home?

What is the difference in your tax liability whether you have a steak dinner at Outback or at home?

​Eating in a restaurant is a luxury and is taxable.

Buying groceries and cooking at home is not taxable.

California and the city collect about 10% of the total bill as sales tax.

Think about it…

You buy a Gatorade from a vending machine.
How does the government collect the sales tax (and CRV)?

Think about it…
You buy a Gatorade from a vending machine.
How does the government collect the sales tax (and CRV)?

The vending machine company must pay the sales tax and the CRV on the Gatorade they sell.

Math Response

You live in Covina and need to buy a washer and dryer for a total of $2,000. How much could you save by driving to West Covina and buying in West Covina?

15

Type answer here

Correct Answer: 15

Deg^°

Rad

Current Sales Tax Rates

Covina

10.25%

West Covina

09.50%

Glendora

10.25%

Azusa

10.25%

San Dimas

09.50%

La Verne

10.25%

El Monte

10.00%

Diamond Bar

09.50%

Walnut

09.50%

You live in Covina and need
to buy a washer and dryer
for a total of $2,000. What
could you save by driving to
West Covina and buying in
West Covina?

Covina Sales Tax

$205.00

W. Covina Sales Tax

$190.00

Savings

$ 15.00

Math Response

You live in Covina and need to buy a new car for a total of $40,000. How much could you save by driving to West Covina and buying in West Covina?

Type answer here

Correct Answer: 0

Deg^°

Rad

Current Sales Tax Rates

Covina

10.25%

West Covina

09.50%

Glendora

10.25%

Azusa

10.25%

San Dimas

09.50%

La Verne

10.25%

El Monte

10.00%

Diamond Bar

09.50%

Walnut

09.50%

You live in Covina and need
to buy a new car for a total
of $40,000. What could you
save by driving to West
Covina and buying in West
Covina?

Covina Sales Tax

$4,100.00

No savings. Auto sales are taxed by

the city in which you live.

Property Tax

An annual ad valorem tax levied on owners of land or building.

based on value

Property Tax

Who Pays

Who Gets

Those who own property, annually

Local (City) and State Government

Interesting Facts
How is this assessed?

1.25% of the assessed value of the property (unless there are local bonds)

In California, the assessed value is protected by Proposition 13 (1978).

Multiple Select

Who collects property taxes?

• The State Government

• The City Government

• The Federal Government

• The Landlord

​

You and your neighbor have the same kind of home that would sell for the same price. You purchased your home last year for $500,000. Your neighbor purchased their home 35 years ago for $50,000. Approximate your property tax liability and your neighbor's property tax liability.

You and your neighbor have the same kind of home that would sell for the same price. You purchased your home last year for $500,000. Your neighbor purchased their home 35 years ago for $50,000. Approximate your property tax liability and your neighbor's property tax liability.

Due to Prop. 13, assessed values are capped at 2% per year.
Your property tax =

Your neighbors property tax =

Capital Gains Tax

Tax levied on the profit from the sale of property or an
investments that is over 1 year.

Capital Gains Tax

Who Pays

Who Gets

Those Benefit From

Federal Government (1040)
State Government (540)

Interesting Facts
Investments held less than 1 year are considered annual income.
Over 1 year, it becomes a capital gain, which is taxed at a lower rate. The lower rate is an incentive to hold on to investments for a longer period.

Who collects capital gains taxes?

Who collects capital gains taxes?

Federal Government and State Government

Multiple Choice

In 2019, you bought stock in Company A and Company B. In 2023, you sold the stocks from both companies. You made $150,000 from the stock in company A and lost $50,000 in the stock of company B. What amount is taxed?

• $150,000

• $50,000

• $100,000

Multiple Choice

In 2019, you bought stock in Company A and Company B. In 2023, you sold the stocks from both companies. You made $150,000 from the stock in company A and lost $50,000 in the stock of company B. How will you report the money you made on your 2023 tax return?

• As Income

• As Capital Gains

​The End