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Part 1: Taxes
Part 1: Taxes
After this lesson, you will be able to:
Read and understand a pay stub
Analyze the different categories of discretionary government spending
Analyze a W-4 form
Taxes: What are they?
Taxes: What are they?
Taxes are money that you are required to pay the government (national, state, local, etc.) to pay for:
Running the Government
Public Services and Programs
Benefits Programs
National Defense
Education
A Ton of Other Things
There are several types of taxes that you might have to pay. They are listed on this infographic.
If you make money, you have to pay taxes.
You employer will take money out of each check so that you don't have to pay all of it in the future.
When you start a job, you'll have to fill out a W4 form. This helps determine how much money is taken out each paycheck.
You'll see the money that is taken out on your pay stub.
Understanding Your Pay Stub.
Understanding Your Pay Stub.
Look over this sample pay stub. Use the information on it to answer these questions.
Understanding the W-4 Form
Understanding the W-4 Form
Look over this sample W-4 form. Use the information to answer these questions.
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Part 2: Paying Your Taxes
Part 2: Paying Your Taxes
After this lesson, you will be able to:
Be aware of the forms you will need to file your taxes
Read and understand a W-2 form
Understand the basic layout of the 1040 form
Paying Your Taxes
If you work, you will probably need to pay Income tax. Tax Day is April 15th.
On or before that day, you need to submit your National forms to the IRS and your State forms to the State of Michigan.
But what forms should you be aware of?
Each year, you will pay taxes for the money that you earn the PREVIOUS year. When the new year starts, your employer will send you a W2 tax form. This tells you how much money you earned and how much tax you have paid to the government. The main tax form is called a 1040 form. The 1040 forms are the one that gets submitted to the IRS and the State.
You may also see a 1099-INT form which shows how much interest you earned from a bank account.
If you do work for people on the side for money, that money gets reported on a 1099-NEC form.
There are tons of other forms that are used for specific purposes. The more complicated your life, the more complicated filing taxes can be.
Analyze this sample W2.
Use the information to answer the question.
Complete the activity for filling out a 1040 form.
The last and most important step is filing your taxes.
For example, we'll look at Melinda Flowers.
She'll need her W-2: HERE.
In real life, she may have some extra tax documents, but we'll use these assumptions for some facts.
With these, we can fill out her 1040 tax form.
Now it's time to try it on your own.
Sit in groups of 3.
For the person whose name you have chosen, use their W-2 form to fill out their 1040 tax form.
The IRS sometimes AUDITS a citizen's taxes. This means that they check submitted tax forms for accuracy.
You can receive heavy penalties if the IRS thinks you are trying to cheat the government.
So it's always important to take your time and fill out your tax forms as accurately as possible.
Pass you finished 1040 form to the person on your right and have them audit (check) your form to make sure you've done it right. If there are errors, fix them. If they are satisfied with your 1040, have them sign their name at the bottom along with a checkmark.
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