Presentation on theme: "2. Display slide 2 with Procedure step 2 in the lesson."— Presentation transcript:
12. Display slide 2 with Procedure step 2 in the lesson. Teacher Instructions1. Print the lesson,2. Display slide 2 with Procedure step 2 in the lesson.3. Display slide 3 with Procedure step 3-5. Click "Definitions" for definitions of taxes, gross pay,and net pay.4. Display slides 4 and 5 with Procedure step 6.5. Display slide 6 with Procedure step 8.6. Display slide 7 with Procedure step 9.7. Display slide 8 with Procedure step 10.8. Display slide 9 with Procedure step 11.9. Display slide 10 with Procedure step10. Display slide 11 with Procedure step 15.11. Display slides 12, 13, and 14 with Procedure step 17. Use the “felt pen” tool to draw a line fromeach good or service offered by the entity noted.AnswersFederal State LocalNational parks State parks Police protectionNational defense State roads Fire protectionInterstate highways Public education Street lightsState troopers Public education12. Display slides with Procedure step 18.Know Your Dough, Lesson 2: "W" Is for Wages, W-4 and W-2.
2Income – The payment people receive for providing resources in the market. Wages – The income for providing human resources (labor).
3John Dough is 16 years old and recently started his first job at ABC Mart. This is his first pay stub for his first two weeks of work.
4Income tax – A tax on the amount of income people earn. How much federal income tax was withheld from John's check?$24.74What percentage of his income was withheld for federal income tax?$24.74 ÷ $ = 0.10 = 10%John works in a state that has a state income tax.How much was withheld for state income taxes?$5.04
5Why wasn’t money deducted from John’s check for medical insurance or retirement savings plans such as a 401(k)?John isn’t a full-time employee―he doesn’t receive abenefits package; so, money wasn’t deducted forinsurance or retirement savings.How did John’s employer know what percentageof John’s income to deduct for federal incometaxes and state income taxes?Employees must complete various forms that give theemployer the information needed to determine this.
8FICA – Federal Income Contributions Act. The FICA tax is a U. S FICA – Federal Income Contributions Act. The FICA tax is a U.S. payroll tax used to fund Social Security and Medicare.Social Security – A federal program that provides benefits for retirees, the disabled, and the minor children of deceased workers.Medicare – A federal program that provides health insurance for people 65 years of age and people under 65 with certain disabilities.
11Taxes are collected on a "pay as you go" principle. Many people, therefore, try to adjust the amount of money they have withheld so that they pay the correct amount of taxes for each paycheck.Some people, however, prefer to receive a refund each year; so, they purposely pay more than they need to pay per pay period.The government does not pay you interest on youroverpayment.
12Federal government provided goods and service What are some goods and services the federal government provides for citizens?Police protectionState parksFederal government provided goods and serviceState troopersPublic educationStreet lightsNational defenseNational parksInterstate highwaysFire protectionState roads
13government provided goods and service What are some goods and services state governments provide for citizens?Police protectionState parksStategovernment provided goods and serviceState troopersPublic educationStreet lightsNational defenseNational parksInterstate highwaysFire protectionState roads
14government provided goods and service What are some goods and services local governments provide for citizens?Police protectionState parksLocalgovernment provided goods and serviceState troopersPublic educationStreet lightsNational defenseNational parksInterstate highwaysFire protectionState roads
15What are wages?Wages are a form of income peoplereceive for work they do.
16What income?Income is payment people receivefor providing resources in the market.
17What are taxes?Taxes are government fees on businessand individual income, activities, products, or property that people are required to pay.
18What is gross pay?Gross pay is the amount people earnin a pay period before any deductionsor taxes are taken out.
19What is net pay?Net pay is take-home pay; it is theamount received after taxes anddeductions have been taken out of gross pay.
20What is the FICA tax?The FICA tax is a tax resulting from the Federal Insurance Contributions Act.
21What does the FICA tax fund? The FICA tax funds Social Securityand Medicare.
22Who pays the FICA tax?Both employees and employers paythe FICA tax.
23What is Form W-4 and for what is it used? Form W-4 is a form that must be completed by an employee before starting a job. It is used by the employer to determine the amount of income tax to withhold for the employee.
24What is Form W-2?Form W-2 is a form employers mustprovide to employees shortly after year-end to report annual income andwithholding for the employee's tax return.