Consumer Ed - Taxes

Taxes

The money you pay to fund the local, state, and federal government

What do taxes fund?

Financial aid, state and local police, public education, national defense, healthcare for elderly, social services

When is tax day

April 15

Audit

Review of records to check legitimacy

Income tax

Money taxed from personal income (federal or state)

Federal taxes

Taxes collected by the federal government, progressive

State tax

Taxes collected by independent states, proportional

Progressive tax

Tax rates are dependent on the income

Proportional (flat) tax

Tax rates do not change based on income

Capital gains tax

Money that is taxed on gains made through the stock market or gambling

Sales tax

A tax on sales or the receipts from sales

Sin tax

A tax on harmful products, beer, tobacco, soda

Excise tax

Indirect tax on goods, specific goods like gas and truck driving

Property tax

Tax on the value of a property, based off of value

Tariff tax

Tax on imported goods and services and exports, whoever imports the product pays tariff

Fees and tolls

Tax for using a public space, register cars, pay for license plate, etc..

IRS

international revenue system , oversees taxes and money

W4

A form filled out for a job, calculates withholdings from check, for your employer

Dependent

People who you support financially

Deduction

Things that can lower your tax liability

Gross pay

Total pay before taxes

Net pay

How much money you receive after taxes

Involuntary withholdings

Something you are required to pay, taxes

Voluntary withholdings

Personal things you pay for with your check, insurance

FICA

Medicare and social security

Medicare

Health insurance

Social security

Money you receive when you retire

YTD

Year to date

W2

Contains info about how much money you have made, how much you have paid in taxes, given to you

1099 INT

Any interest you have made this year

1099 DIV

Any dividend money made

1040

Paperwork to show you have paid your taxes and can receive a refund or pay the rest of their money owed, shows deductions

Tax avoidance

Legal, arranging affairs to minimize tax liability within the law, certain circumstances allow you to pay your taxes later

Tax evasion

Illegal, Failure to pay taxes or misrepresentation of amount owed

Voluntary Compliance

Each person in responsible for filing a tax return