Tax Basics
What are taxes used for?
roads, schools, military, police/fire departments, healthcare programs.
That taxes go mostly to funding public schools?
Property taxes
What does it mean to “file your taxes”?
Submitting information about your income and taxes to the government.
What lowers your taxable income when filing taxes?
Deduction
If you paid too much tax during the year, what might you receive?
A tax refund.
What are two different types of taxes?
Income tax, payroll tax, sales tax, gas tax, property tax.
What tax mostly goes to funding roads and infrastructure?
Gas tax
What government agency do most Americans file taxes with?
IRS (Internal Revenue Service)
What directly reduces the amount of tax you owe when filing your taxes?
Tax credit
If you didn’t pay enough tax during the year, what happens?
You owe money.
What is a tax?
Money people and businesses must pay to the government.
What is one item that is exempt from sales tax?
Non prepared food items, some beverages (bottled water, tea, coffee), prescription drugs and medical equipment.
Who usually has to file taxes?
People who earned income over a certain amount during the year.
If Amy owed $3,000 in taxes and had three children that she claimed a $1,500 child tax credit for, how much would her refund be?
$1,500 refund
What happens if someone doesn't file their taxes correctly?
The IRS may fix small errors, you may have to fill out an amended tax return and/or you may receive a smaller refund.
Why do governments collect taxes?
To pay for public services and programs.
What tax goes to social programs like social security?
Payroll tax
What form do employers send workers that shows how much they earned?
W-2
How should someone decide whether to take the standard deduction or use an itemized deduction?
They should claim the deduction with the higher value.
What happens if someone doesn't file their taxes?
They may have to pay a fine, lose their refund, or they many take money from their paychecks.
What day are taxes due each year?
April 15th