1 / 12

Income Taxes

Income Taxes. Filing a Tax Return. Vocabulary. Gross earnings : Pay/salary before taxes Net earnings : Pay/salary after taxes Earned income : Pay that you receive for work. Unearned income : Money from investments. Taxable income : Gross earnings minus exemptions and deductions.

gunnar
Download Presentation

Income Taxes

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Income Taxes Filing a Tax Return

  2. Vocabulary • Gross earnings: Pay/salary before taxes • Net earnings: Pay/salary after taxes • Earned income: Pay that you receive for work. • Unearned income: Money from investments. • Taxable income: Gross earnings minus exemptions and deductions. • Withholding: A system where employers collect estimated taxes from individuals throughout the year and send that money to the government. • Tax return: A document that a taxpayer completes to calculate how much tax is owed, how much tax was withheld, and how much tax he/she overpaid or underpaid. • Payroll tax: Taxes that are collected by the employer directly and sent to the government.

  3. Pay Check Stub #1

  4. Pay Check Stub #2

  5. Pay Check Stub #3

  6. Federal Income Tax • What is taxed: Earned and unearned income • Computation: 1) Calculate taxable income by subtracting exemptions and deductions from “gross income,” then 2) use the tax table to find tax owed. • Time of collection: Tax is withheld from each paycheck by the employer and sent to the IRS. Tax return is filed by April 15 each year. • Progressive, Regressive, or Proportional? • Simple? • Fair?

  7. Social Security Tax • What is taxed:Earned income • Computation: Income * 6.2% (up to $106,800 of earned income) • Time of collection: The employer sends this payroll tax directly to the federal government. • Progressive, Regressive, or Proportional? • Simple? • Fair?

  8. Medicare Tax • What is taxed:Earned income • Computation: Income * 1.45% • Time of collection: The employer sends this payroll tax directly to the federal government. • Progressive, Regressive, or Proportional? • Simple? • Fair?

  9. PA Income Tax • What is taxed:Earned and unearned income • Computation: Income * 3.07% • Time of collection: Tax is withheld from each paycheck by the employer and sends the money to the PA Department of Revenue. A tax return is filed by April 15 each year. • Progressive, Regressive, or Proportional? • Simple? • Fair?

  10. PA Unemployment Tax • What is taxed:Earned income • Computation: Income * 0.09% • Time of collection: The employer sends this payroll tax directly to the state government. • Progressive, Regressive, or Proportional? • Simple? • Fair?

  11. County or Municipal Earned Income Tax • What is taxed:Earned income • Computation: Income * 1.0% in those counties or municipalities that collect it. Montgomery County does not collect EIT. UM doesn’t collect it. Bridgeport does collect it. • Time of collection: Tax is withheld from each paycheck. Tax return is filed by April 15 each year to the county tax collector. • Progressive, Regressive, or Proportional? • Simple? • Fair?

  12. Emergency Services Tax • What is taxed:Earned income • Computation: A flat dollar amount up to $52 per year. • Time of collection: The employer sends this tax directly to the municipal tax collector. • Progressive, Regressive, or Proportional? • Simple? • Fair?

More Related