Income Taxes

Taxes

​

Types of Taxes

• Income Taxes: Federal and state taxes on the income you earn

• Property Taxes: Taxes you pay on homes, land, or commercial real estate

• Payroll Taxes: Include FICA and unemployment deductions

• Sales Tax: Tax paid to a governing body on the sale of goods and services

• Sales Tax - a tax on things bought/services a person purchases.

• Property Tax - a tax on the value of a home, land or other item someone owns.

• Income Tax - a tax on the money a person makes.

How to Read a Pay Stub?

Questions:

1.What is the difference
between gross pay and
net pay?

2.What is an example of a required deduction?

3.What are two examples
of Employer
Contributions?

GROSS V. NET PAY

• Gross Pay - Before taxes taken

• Net Pay - After taxes taken out

Multiple Choice

Roads, police, schools, governmental agencies, fire and emergency services are funded by taxes.

• True

• False

Multiple Choice

Our tax money is spent on all of the following EXCEPT:

• Social Security

• The Military

• Private School Education

• National Parks

Multiple Choice

The amount of money you make before taxes and deductions....

• Gross Pay

• Net Pay

Multiple Choice

Louis's dad pays a tax to the federal government each year based off the money he earns from his business. What type of tax is Louis' dad paying?

• Payroll tax

• Sales tax

• Property tax

• Income tax

Multiple Choice

Roads, police, schools, governmental agencies, fire and emergency services are all funded by taxes

• true

• false

Multiple Choice

The amount you receive from your employer in the form of cash or direct deposit is considered your net pay.

• True

• False

Multiple Choice

IRS stands for

• Internal Revenge Service

• International Revenue System

• Internal Revenue Service

• Inspection Ravioli Sauce

Multiple Choice

Your parents pay $3500 in taxes each year based off of the value of your home. Which type of tax is this?

• Payroll tax

• Property tax

• Sales tax

• Income tax

Tax Forms + Vocab

• 1040EZ - No Dependents/100k<

• 1040A - Dependents/ 100<

• 1040 - 100k>

• Child Tax Credit - $ per child

• Earned Income Tax Credit - $ for low income

• Itemized Deductions - reduce tax bill

• Dependents - people you can claim

Earned Income Vs. Unearned Income

Earned Income

-Work for this income - Must pay federal income tax (Social Security,
Medicare, etc.)

Unearned Income

-Income from gifts, capital gains, qualified dividends - Do not pay Federal
income tax but this income is calculated into your income tax return

Multiple Choice

Which is the most complicated tax form?

• 1040

• 1040A

• 1040EZ

Do I Need to File a Return?

1.

Dependents (You - child of parent)

Earned Income - More than $12,550

Unearned Income - More than $1,100

Gross Income - Total Income is more than $1,100

2.

Self - Employed Workers (Have own business - including part - time;
contract) - Earn more than $400 - Pay a different tax rate

3.

Household Employees (Employee - Your boss/employer pulls out your
taxes of your paycheck) - Earned more than standard deduction $12,550

​*If you have a job you should file taxes but this is who is required

Multiple Select

Who primarily uses our tax money? (2 correct answers)

• Your employer

• The state government

• The Federal government

• Local Businesses

Gross vs Net Pay

• Gross Pay - before taxes or an deductions are taken out

• Net Pay - The amount you deposit into your banking account. This is the amount after taxes and deductions have been taken out.

Multiple Choice

Total money you earn before taxes and other deductions.

• Salary

• Net income

• Gross income

• Wages

Multiple Choice

Taxes get taken out of everyone's paycheck.

• True

• False

Multiple Select

The Earned Income Tax Credit reduces the amount of tax owed and may result in a refund

• True

• False

Multiple Choice

IRS stands for:

• Internal Revenge Service

• Internal Revenue Service

• International Revenue System

• Italian Ravioli Sauce

Multiple Choice

Everyone who has a job or once you turn 18 should file a tax return every year.

• True

• False

Multiple Choice

Also known as your take home pay.

• Salary

• Gross pay

• Net pay

• Withholdings

Gross, Net, Taxable Income

Gross Income - what you earn/before taxes are taken out (contract worker, etc.)

Net Income - what you take home/ after taxes and deductions have been taken
out

Taxable Income - Gross Income then certain deductions are subtracted from
(AGI - adjusted gross income - this is used to calculate tax bracket/percentage)

Multiple Choice

These taxes come out of a person's paycheck and is meant to help people once they retire.

• 401k

• Social security tax

• Unemployment taxes

• Payroll deductions

Multiple Choice

What type of income are your taxes based on?

• Gross Pay

• Net Pay

• Taxable Income

Multiple Choice

This tax form is received when you start a new job. It determines how much money gets taken out of each paycheck.

• W-4

• W-2

• 1099

• 1040

Timeline of Filing Taxes

Start New Job - Fill out W4 Form - states how much taxes you want taken out of Paycheck

January - W2 Form will be sent to you from employer/boss or fill out 1099 (self employed) - states your
income from January - December from prior year

January - April 15th : File Income Taxes (usually through Turbotax or H&R Block) - may receive a refund
(paid too much in taxes) or a owe the IRS (did not pay enough taxes/ Tax Evasion)

*May have to file state taxes (Texas does not have state income taxes)

Multiple Choice

This is a form you fill out by April 15th to determine how much you either owe or will be refunded in taxes for the previous year.

• W-4

• W-2

• 1099

• 1040

Multiple Choice

When is the deadline for your income tax return?

• January 1st

• January 31st

• April 15th

• April 1st

IRS Form W4

You will fill this out for every employer/
when you get a new job or multiple jobs

-Section three = edit if you want more
or less pulled out of paycheck - affect
your tax return = refund or owe status

Poll

Have you ever filled out a W4?

• Yes

• No

• I have no idea

Tax Forms - Before you Start Job

W4 - How much taxes to take out of your paycheck

https://www.irs.gov/pub/irs-pdf/fw4.pdf

Tax Forms - Before you Start Job

I-9 Employee Eligibility Verification

https://www.uscis.gov/sites/default/files/document/forms/i-9-paper-version.pdf

Multiple Choice

The form you fill out when you get a job to verify you can work is a ​​

• W4

• I-9

Multiple Choice

The form you fill out when you get a job for taxes to be pulled from your paycheck is called...​

• W4

• I-9

Tax Forms - January/File Taxes Every Year

W2 - You get from every job you worked in January every year

*States income and
taxes taken from your
paychecks

Tax Forms - January/File Taxes Every Year

1040 - Income Tax Form Return

*

If you file through

TurboTax or HRblock or
accountant - they fill out

the form for you

Tax Forms - January/File Taxes Every Year

1099 - File “other” income/ Did not get taxes taken out of paycheck

(contract)

Match

Match the following

• W2

• 1040

• 1099

Receive every January from each employer, states income and taxes paid

Basic Tax Return Form

Form you have to fill out if did not have taxes taken out of your paychecks

• Receive every January from each employer, states income and taxes paid

• Basic Tax Return Form

• Form you have to fill out if did not have taxes taken out of your paychecks

Tax Forms - Comparison

Before you start a job

Every January - April (while you file taxes)

• W4

• I9

• W2

• 1040

• 1099

Multiple Choice

What form do you get every year from your employers that help you file your income tax return?

• W4

• W2

• 1040

Basics Tax Return

1.

Gross Income

-Deductions

Adjusted Gross Income (AGI)

2. Adjusted Gross Income (AGI)

-Standard or Itemized Deductions (whichever is more)
Taxable Income

3.
Taxable Income x Tax Rate(based off table - how much you make) = Tax Liability

4.

Compare:
Tax Liability & Taxes Paid
-If you overpaid, you get a refund
-If you did not pay enough taxes
you owe

Poll

Will you file an income tax return in January? (If you have a job anytime in 2021 you should)

• Yes

• No

• Maybe