Taxes

What is Flat Tax?

Everyone pays the same rate

What is Progressive Tax?

Tax rate depends on your income

What are some pros to Progressive Tax?

The burden of paying taxes falls less on people with lower incomes and it could potentially be more fair.

What are some cons to Progressive Tax?

It is not fair to people with higher incomes and it can cause people to stop working hard

What are some pros to Flat Tax?

It is fair to everyone because everyone is paying the same rate and it could encourage people to work harder.

What are some cons to Flat Tax?

The burden of paying taxes falls more on people with lower incomes, which people find unfair.

What is April 15 (4/15)

Tax day- you send your taxes to the IRS

What is January 31 (1/31)

The day your employer has to give you your W-2 by.

What is the calendar year (365/366 days)

How many days you have to pay taxes on.

What is a W-2 form?

Contains all of your tax info for the year. Provided by employer.

What is a W-4 form?

It tells you how much to withhold from your paycheck for taxes. Filled out before working. Determines if you owe money or if you need a tax refund.

What is a form 1040?

This is your tax return. It includes information like your income earned and taxes paid.

What are the 5 major types of taxes you pay?

Federal income tax, state income tax, property taxes, sales tax, and excise tax (sin tax).

What is some info on federal income tax?

Federal Income tax supports goverment funded programs (TSA, social security), federal charges it, and it is a tax on what you earn. Ex: The U.S. Military

What is some info on state income tax?

They fund state services (Parks, police), the state charges it, charged from your income, and not every state has it. Ex: Police, certain roads, state fair

What is some info on Property taxes

They fund public schools, they are charged by the local government, and it is charged on certain assets. Ex: Homes, land, your car. Based on the value of home and location

What is some info on sales tax?

It is taxed on stuff you buy, it is charged by both state and local tax, it is charged on products, and it is an example of regressive tax. Ex: Anything you buy. Not in every state.

What is some info on excise tax?

AKA Sin tax, it is a tax on goods in an attempt to reduce their usage. Ex: Alcohol, tobacco, prescription drugs, weapons, etc.