Individual Income Tax Pt. 1
True/False
Interest Income is taxable
True
What is a 1040?
U.S. Individual Income Tax Return
What is the social security rate for the employee?
6.2%
What is the Nebraska Homestead Exemption?
This exemption provides a reduction in the assessed value of a property, resulting in lower property taxes. To qualify, the property must be the homeowner's primary residence.
(Based off income)
Do you have to pay sales tax on the purchase of a new vehicle?
Yes
Explain how Gambling Income works.
You must report all winnings over $600 and you are allowed to deduct your losses up to you winnings amount.
Explain Capital Gains/Losses with an example.
Answers vary
What is the medicare rate for employees?
1.45%
Name FOUR things our property taxes are funding.
Local Government Services
Education Funding
Infrastructure Projects
Health & Human Services
Community Development
Debt Services
Public Facilities & Services
The sales tax rate for the state of Nebraska is a flat tax rate before cities/towns choose to impose their rate. What is the flat sales tax rate for Nebraska?
5.5%
Why do people support the Progressive Tax System?
It allows for less of a tax burden on low income earners and puts more of the burden on high income earners.
Why do people NOT support the Progressive Tax System?
People believe it disincentivizes people from earning more money.
People believe it places all of the burden on those who worked hard for their money.
What four taxes does the EMPLOYEE pay in Nebraska?
Federal Income Tax
State Income Tax
Social Security Tax
Medicare Tax
What are the three factors that go into the assessment process of a home for real estate taxes?
Location
Size
Improvements
What is something that sales tax would be imposed on in a grocery store?
Answers may vary
Names the three most common filing statuses
Single
Married Filing Jointly
Head of Household
What is the Standard Deduction for the following for the 2023 tax year?
Single
Married Filing Jointly
Head of Household
Single - $13,850
Married Filing Jointly - $27,700
Head of Household - $20,800
Aside from social security and Medicare, what other two taxes does the EMPLOYER pay?
Federal Unemployment
State Unemployment
What is a tax lien sale?
An investor buys a tax lien on someone's property and pays the taxes. The homeowner then pays the investor back with interest applied.
Name four things sales tax helps fund.
State & Local Government
Education Funding
Infrastructure
Public Safety (police department, fire department, etc.)
Health & Human Services
Environmental Protections/Public Park & Recreation
Name all of the tax brackets in order
10%
12%
22%
24%
32%
35%
37%
Name all nine states that do not impose a state income tax.
Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming
How much would an employee pay in social security and medicare tax on $6,500.00 of income?
Social Security - $403.00
Medicare - $94.25
Failure to pay property taxes can result in what three things?
Penalties
Interest
Loss of property
Name one good or service that sales tax does not apply to aside from unprepared food.
Accounting Services
Legal Services
Prescription Drugs
Medical Equipment