DO NOW: Can you explain why a worker earns $1000 but receives a paycheck for less than $1000? What happens to the amount earned but not received by the employee? (Answer on the back of this sheet or on a separate sheet of paper)
IRS Tax Tutorials – The How’s of taxes http://apps.irs.gov/app/understandingTaxes/student/hows.jsp Complete lessons 1, 2, 10 and 14 – try out the Tax Tutorial, Simulation and Assessment. Finish with a skill check.
The Why’s of Taxes • http://apps.irs.gov/app/understandingTaxes/student/whys.jsp Complete the following lessons: Theme 4, Lesson 1 Theme 6, Lessons 2 and 3
Completing IRS Form W-4 The employer withholds payroll taxes from employee pay. Employers do not keep this money. Instead, it is sent to the appropriate authorities. So, how does the employer know how much income tax to withhold? Why does it vary from employee to employee? (Answer on the back of this sheet or on a separate sheet of paper)
IRS: Tax calculator Go to the following 2 websites: http://www.bls.gov/oes/current/oes_nat.htm OR http://www.simplyhired.com/a/salary/home and select a potential job that you would eventually like to have. Use the Annual average wage/salary to calculate how much you would have to pay in taxes with that job using the link below. http://apps.irs.gov/app/withholdingcalculator/ (Answer on the back of this sheet or on a separate sheet of paper)
Scenario 1: Single person Rent: $1,000/month Food: $250/month Transportation (car payment, gas, insurance): $350/month Utilities (gas, heat, electricity): $200/month Phone, Internet: $100/month Other: $___/month Calculate how much you will need to earn per year to cover all of your expenses after taxes. What is that amount? (Write your answers on the back of this sheet or on a separate sheet of paper)
SUMMARY What is the most fair way to collect taxes? Why might a national sales tax be more equitable than a national income tax? Explain. Write your answers on a separate sheet of paper or on the back of this sheet. This is due on Monday, April 29.