Transcript 19- Tax Information

19- TAX INFORMATION
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W E H T U Z 9 _ RU K LGE I M F B 1 U VA & F E AT U R E = S H A RE & I N D E X= 3
S T I L L P RO C R A S T I N ATI N G ?
D O N ’ T D O TA X E S A LO N E P O O L B OY
Tax Basics
Social Securities
and Medicare
Per sonal Income
and Proper ty
Taxes
Tax Returns
TAXES
Payroll taxes
 Social security
 Personal income tax
Purchases taxes
 Sales Tax
 Excise tax
 Alcoholic beverages
 Firearms
 gasoline
Property taxes
 Real estate tax
 Personal Property tax
Wealth taxes
 Estate tax
 Gift tax
TAXES
The purpose of taxes
has always been to
pay for government
operations,
facilities, and
services.
TAX BASICS
TAX BASICS
 What kind of taxes
are likely to pay for
universities or police?
 What is the defining
feature of a
progressive tax?
 State taxes
 those with more
money and ability to
pay carry a greater
tax burden than those
with little money.
 Tax rate
 ratio
 University
 Police
 education
TAX BASICS
 Federal tax is a tax
collected by the
federal government to
pay for federal
programs.
 State tax is a tax
collected by state
officials to fund
programs, projects,
and infrastructure of
the state.
TAX BASICS
 Payroll tax is a tax
imposed on an
employee's wage or
salary in the form of
Social Security and
Personal Income
taxes.
 Purchase tax is a tax
that local or state
officials place on the
purchase of goods or
services.
TAX BASICS
 Wealth tax is a one time
tax levied by the federal
government on an estate
or the transfer of funds
on any amount over
$10,000.
 Property tax is the
taxation on property that
you own.
 Internal Revenue Service
is a branch of the federal
government that oversees
the collection of taxes.
TAXES
 Mary has determined that,
based on her annual
income of $36,000, her
federal income tax for the
year is $5,424. Mary gets
paid on a bi-weekly basis,
giving her 26 paychecks
throughout the 52 week
year.
 What is the minimum
amount Mary must have
withheld from each of her
26 bi-weekly paychecks in
order to avoid owing the
federal government at the
end of the year?
 5,4242 / 26 pay checks
=
 $208.62 Federal
withholdings
SOCIAL SECURITIES AND
MEDICARE
SOCIAL SECURITIES AND MEDICARE
 Besides the elderly and
retired, who can benefit
from Social Security?
 Disabled
 Family members of
deceased, disable, or
retired
 What are the
differences between
Medicare Part A and
Medicare Part B?
 Medicare Part A
 Automatically
 Costs nothing
 Covers hospital services
 Medicare Part B
 Optional and costs for plan
 Covers doctor visits,
outpatient services, etc.
SOCIAL SECURITIES AND MEDICARE
 Social Security is a social
insurance program
created to aid individuals
in retirement or those
that have become
disabled.
 Medicare is a social
insurance program
focused on providing
medical insurance to
individuals 65 or older, or
who meet specific
criteria.
SOCIAL SECURITIES AND MEDICARE
 Federal Insurance
Contributions Act tax, or
FICA tax, is a tax placed
on wages to fund Social
Security and Medicare.
 FICA tax Around 7.5%
 Payroll tax is a tax
imposed on an
employee's wage or
salary in the form of
Social Security and
Personal Income taxes to
pay for federal or state
programs.
SOCIAL SECURITIES AND MEDICARE
PERSONAL INCOME AND
PROPERTY TAXES
http://www.myfreetaxes.com/get organized/w -2-and-1099-income-taxstatements/
“How to fill out a W -4 form”
PERSONAL INCOME AND PROPERT Y
TAXES
Where do Tax
Dollars go?
Look at your W-2
form.
Certain percentage
goes towards:
 federal taxes
 state taxes
 Medicare
W-4 form
employee
withholding and
allowances
PERSONAL INCOME AND PROPERT Y
TAXES
 Sold a home at valued
at $112,000.00
 112,000 x Rate =
8,400
 If a real estate made
$8,400 in commission
from a sale.
 Rate = 8,400

112,00
 Dollar amount sold x
Rate of Commission =
Straight Commission
 Rate = 0.075 or 7.5%
PERSONAL INCOME AND PROPERT Y
TAXES
This year, you owed
$6,414.95 in federal
income tax. If you
are taxed at a net
rate of 17%, what
was your taxable a.
income for this
b.
year?
c.
d.
Multiply the total by
7%
$109,054
$26,792
$44,867
$37,735
PERSONAL INCOME AND PROPERT Y
TAXES
 Why might two people
in the same state with
the same salary pay
different rates of
income tax?
 More deductions
 More or less credits
 Free to find as many
deductions as
possible
 What is revenue from
property taxes usually
used for?
 usually used for
financing public
services,
 public schools
 police protection
 sanitation
PERSONAL INCOME AND PROPERT Y
TAXES
 Income tax
 Property Tax
 Tax Refund- $$$ in your
pocket
 IRS
 Withholding allowancean allowance that can be
claimed on a W-4 form,
thus reducing the amount
paid towards taxes
TAX RETURNS
Did you receive money
from the government?
TAX RETURN
Computing Tax
Return
Preparation
Transmission
Internet and
software is all you
need
Tax Professional
Tax Attorney
Certified Public
Accountant
Tax Prep Business
TAX RETURN
 Tax forms
 1040
 1040A
 1040 EZ
 State form
 Local Tax form
1. Gross income
2. Minus adjustment to
income
3. = adjusted gross
income
4. Adjusted gross
income
5. Minus deduction
and Exemptions
6. Equals Taxable
income
TAX RETURN
 The Halls have a gross
income of $75,875. They
file jointly. They make
payments to an approved
retirement plan of
#3,000. Their itemized
deductions were only
$7,015. The claim two
exemptions.
 What is their taxable
income?
 Married deduction is
11,400, $3,650 per
exemption
 (75,875) – (3000) =
$72,875
 (72,875) – (11,400) =
2(3,650)
 = $54, 175 taxable
income
TOPIC TEST