Types of taxes
Tax
A payment imposed by a governmental unit
IRS Stands for?
Internal Revenue Service
if you earn $40,000 and pay $4,000 in tax, what percent is that?
10 percent
Overtime
Time worked beyond your regular scheduled hours.
what is a flat tax where everyone pays the same rate called?
Proportional Tax
Proportional tax
A tax with the same percentage rate for everyone - Ex: Sales Tax (NYS 8.75%)
What is the IRS responsible for?
Collecting taxes and enforcing tax laws.
Why do tax rates increase as income increases in the U.S.?
Because the US uses a progressive tax System
what is a financial plan
A set of goals for spending, saving and investing the money you receive.
Fill in the Blank - If taxes are you pay, _____________ is what the government gets from taxes.
Revenue
regressive tax
People with less money pay more of what they have.
what is the purpose of a IRS Audit?
To verify the accuracy of a taxpayers return and ensure that income and deductions are reported correctly
Name one legal way to reduce your taxable income.
Using deductions such as Standard or Itemizing you deductions (SALT, Mortgage interest, Charitable donations, medical expenses above 7.5% of AGI, Disaster losses from federally declared disasters, Gambling losses (up to winnings), Investment interest
What does a W-2 Show?
How much you earned ad how much tax was withheld.
What is the willful failure to pay your taxes called?
Tax evasion
Property tax
Taxes paid on a property land/ buildings.
Where does the IRS have Head quaters?
Washington DC
Why do need Taxes?
To pay for public services like schools, roads, police, and the military.
Fixed Expenses
Costs that do not change from month to month.
Audit
Sales Tax
Tax paid on purchases (NYS 8.75)
how can you have your refund direct deposited into your account?
When you file your taxes, enter your bank routing number and account number to have your refund direct deposited.
What is one example of proportional tax in the U.S?
Sales Tax (or any FLAT Tax paid by EVERYONE or the people who buy it.)
OR
Excise taxes (sin taxes) → Taxes on cigarettes and alcohol.
What is Gross pay?
All the money you earn before taxes (deductions)
What do we call a range of income that is taxed at a specific rate?
Tax Bracket