Vocabulary
A portion of money that a person or business is required to pay to the government.
Tax
Roger's gross wages for 2024 totaled $55,000. He had $4,619 withheld in federal income tax, $3,410 withheld for social security, and $797.50 withheld for Medicare tax. What was Roger's net income?
$46,173.50
What is the name of government department that is responsible for processing and verifying the amount of taxes you paid?
The IRS (Internal Revenue Service)
April
What math operation is used when applying a deduction?
Subtraction
What is the difference between gross and net income?
Gross is before taxes are taken
Net is after taxes are taken
How much would a SINGLE person who earned $75,000 owe in federal income tax based on the standard deduction amounts and the 2024 tax table?
75,000 - 14,600 = 60,400
Taxes owed: $8,347
Give one example of a category that the government spends tax dollars on.
Potential Answers: Health, Education, Military, National Debt, Transportation, Criminal Justice, etc.
Why might someone NOT receive a tax refund and have to pay extra taxes when filing their taxes?
They did not have enough taxes withheld throughout the year.
True or False: Your standard deduction is based on the amount of money you make.
FALSE: It is based on your filing status
The amount of money that is automatically taken from your paycheck throughout the year is know as "taxes ___________"
withheld
Harry is filing head of household AFTER the standard deduction was applied his taxable income was $23,100. What amount of taxes is he responsible for paying?
$2,444
A federal health insurance program funded by taxpayers in the United States for people ages 65 or older and younger people with disabilities.
Medicare
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What is the amount of income that must be taxed referred to as?
Taxable income
A classification used by the Internal Revenue Service (IRS) to determine the tax rates and the amount of tax that an individual or couple is responsible for.
Filing Status
George is single and had $3,000 withheld from his paychecks. His taxable income AFTER the standard deduction has been applied is $40,120. Did George overpay or underpay throughout the year? How do you know?
Underpaid because the tax table amount states that he should have paid $4,583
A federal program funded by taxpayers that provides retirement income and financial assistance to disabled individuals
Social Security
Who do you receive a W-2 form from?
Your employer
If someone has more taxes withheld than what they are required to pay, they will receive a _________.
Refund
A specific amount of your income that will NOT be taxed. The amount for each taxpayer is based on their filing status. Taxpayers can subtract this amount from their taxable income to reduce the amount of income that is subject to federal income tax.
Joe's taxable income AFTER the standard deduction is applied is $11,000. He falls into the 10% tax bracket. How much does he owe in taxes?
Find 10% of $11,000
11,000 (.10) = $1,000
BESIDES Medicare, Social Security, and Federal Income Tax, what is another type of tax that an individual may have to pay based on where they live?
State Tax
In 2024 Jill had $4,500 in federal income tax withheld from her paychecks. When she filed her taxes, it was determined that based on her income for 2024 she only needed to pay $4,000 in federal income tax. Does Jill owe additional money to the IRS or does the IRS owe her money?
Jill should receive a refund of $500
What does it mean to have a dependent?
To have someone who depends or relies on you financially.