Unit 3 final exam review

Unit 3

Final Exam Revie

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Two Types of Income

Earned Income Unearned Income

What are taxes?

Taxes are fees that the government requires people to pay to work and live in the US.

A taxpayer is a person that is responsible for paying taxes.

If a person is a dependent, they depend on someone else

to support them.

The money collected is combined and used to provide

us all with benefits.

A few things funded by taxes that might benefit you personally

are: the school bus, a local community center, a library,

your school, a health clinic, etc.

How do we pay taxes?

First, you must earn or obtain unearned money.

When you get a job, you will fill out new hire paperwork.

One form will be a W-4.

This tells the employer how much money to keep out of your paycheck.

As you work, the money that the employer keeps out of your

paycheck makes its way to the state and federal governments.

January 31st is the last day employers have to send out W-2’s to their employees or past employees

who worked for them in that previous year.

The W-2 form is used to fill out tax forms, like the 1040EZ.

You must send in completed tax forms to the IRS and NC Department of Revenue by April 15th each year.

If you owe money, you must send the money in with your tax forms by

midnight of April 15th each year.

If you are owed a refund, it could take a few days or up to 6 weeks, or

longer, to receive your money.

When filing returns, remember that there are two options.

You can itemize your deductions or take a standard deduction.

Standard Deductions ensure that all taxpayers have at least some income

that is not subject to being taxed by the government.

The Standard Deduction amount is based on your filing status and can be

read off the tax forms.

http://www.dor.state.nc.us/aboutus/education/filling_out_d400_2014.pdf

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