IDENTIFY THE MAJOR TYPES

OF INDIVIDUAL TAXATION.

Task 73

Personal Property Tax

Tax that requires the

owner to pay a

percentage on the value

of their property

real estate

motor vehicles

Primary tax supporting

public education,

emergency services, and

local government

Income Tax

Requires workers to pay a

percentage of their

earned income

federal government

state governments

Amount paid depends on

your tax bracket

Sales Tax

Consumption tax

charged at the point of

purchase for certain

goods & services

VA: 6%

Sales tax in restaurants

may very by county (local government)

FICA

Refers to Social

Security and

Medicare taxes paid

by individuals and

employers

5.65% of gross pay

Employer “matches”

another 5.65%

CONSUMER TAXATION

Task 75: Compute gross and net pay.

Understanding Your Paycheck

Gross Pay: Wages & Salary

Deductions: Federal taxes, state taxes, FICA,

and other optional deductions, such as health

insurance, dental and retirement savings.

ake-home pay, calculated by

subtracting deductions from gross pay.

Gross Pay – Deductions = Net Pay

In Your Notes

• Look over the paystub provided.

• Circle & label the employee’s gross pay.

• Draw a rectangle around all the deductions for this

paycheck.

• Circle the employee’s net pay for this paycheck.

• How much did the employee pay in taxes?

• What percentage of the employee’s gross pay went

toward taxes?

NET PAY WORKSHEET

COMPLETE PERSONAL

INCOME TAX FORMS.

Task 74

Form W-4

A new Form W-4 is required each time

you start a new job.

It determines how much you will pay in

taxes each pay period (per paycheck).

Use a QR Reader on this code to see a

W-4 form. Download the free app if

needed.

Form W-4 – Additional Info

If you claim zero, the

highest amount of

taxes will be withheld

from your paycheck.

Form W-2

The Form W-2 is a federal tax form issued by employers at the end of each year.

Must be distributed to employees by the end of February

Required for filing income taxes by the April 15 deadline

It states the amount of money you earned and how much you paid in taxes throughout the previous year.

Form W-2

Real World Business

Chicago, IL 60640

Irma Money

2301 South Jackson

Chicago, IL 60640

000-00-000

16,680.24

16,680.24 1034.16

1,728.00

241.9216,680.24

IL 12-2222222 16,680.24 440.40

12-2222222

D 2000.00

Real World Business

Chicago, IL 60640

Irma Money

2301 South Jackson

Chicago, IL 60640

16,680.24

16,680.24 1034.16

1,728.00

241.9216,680.24

I

L

12-222222216,680.24 440.40

12-2222222

D2000

Forms for Filing Taxes

1040 EZ

Use this form if…

Income is less than $100,000

Filing as single or married

Under age of 65

No dependents

1040 A

Use this form if…

Income is less than $100,000

Claiming adjustments for student loan

interest

1040

Use this form if…

Income equals or exceeds $100,000

Self-employed

1099

Used to report taxable income, such as

interest, dividends, stock sales, etc.

Filing Your Tax Return

In the past, you would prepare your taxes and

mail your complete package in to the Internal

Revenue Service (IRS).

Most people now use TurboTax to prepare

their taxes and then e-file online with the IRS.

Student Tax Simulations

Complete the following modules, then answer the

questions at the end of your notes.

• Lawrence Red Owl

• Cicely King

• Tasha Miller

• Michael Brand

• Jacob Hastings

Use IRA Student Simulator at:

https://apps.irs.gov/app/understandingTaxes/student/simulations.jsp

FORM W-2 & FORM W-4