1. Introduction to Business & Marketing

2. LEARNING OBJECTIVES  Understand taxes and payroll deductions  Identify the major types of consumer taxation.  Compute gross and net pay.  Complete personal income tax forms.

3. WHAT ARE TAXES  A sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc.

4. TYPES OF CONSUMER TAXATION

5. PERSONAL PROPERTY TAX  State mandated tax requiring the owner to pay a percentage on the value of their property  Homes  Cars  Recreational Vehicles  Main tax supporting public education, emergency services, and local government

6. INCOME TAX  Requires workers to pay a percentage of their earned income  Imposed by the federal government and by most state & local governments  Amount paid depends on your tax bracket

7. SALES TAX  Consumption tax charged at the point of purchase for certain goods & services  Each state or jurisdiction can set its own sales tax percentage

8. SALES TAX EXAMPLES  Virginia – 5%  Tennessee – 9%  Oregon – 0%  Delaware – 0%  California – 11%

9. FICA  Federal Insurance Contribution Act  Payroll deductions paid by individuals  Social Security - 12.4%  Medicare – 2.9%  If you are a wage or salary employee your employer pays half  Self employed – you pay all

10. UNDERSTANDING YOUR PAYCHECK

11. WHEN YOU GET PAID…  Gross Pay: wages & salary  Deductions : federal taxes, state taxes, FICA, and other optional deductions  Optional deductions include things like health insurance, retirement, etc.  Net Pay: take-home pay  Calculated by subtracting deductions from gross pay

12. 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?

13. INCOME FORMS

14. FORM W-4  Completed every time you start a new job  Determines how much you will pay in taxes each paycheck  If you claim zero, the highest amount of taxes will be withheld from your paycheck.

15. FORM W-2  Federal tax form issued by employers that states how much an employee was paid in a given year  Used to complete tax return Real World Business Chicago, IL 60640 Irma Money 2301 South Jackson Chicago, IL 60640 000-00-000 16,680.2 4 1034.16 1,728.00 241.9216,680.2 4 ILIL 12- 2222222 16,68 0.24 440.40 12- 2222222 D200 0.00 Real World Business Chicago, IL 60640 Irma Money 2301 South Jackson Chicago, IL 60640 16,680.24 1034.16 1,728.00 241.92 16,680.24 ILIL 12- 2222222 16,680.24440.40 12-2222222 D 2000

16. FORMS FOR FILING TAXES

17. TAX FORMS 1040 EZ 1040A Use this form if… Income is less than $100,000 Filing as single or married Under age of 65 No dependents Use this form if… Income is less than $100,000 Claiming adjustments for student loan interest

18. MORE TAX FORMS 10401099 Use this form if… Income exceeds or equals $100,000 Self-employed Used to report taxable income, such as interest, dividends, stock sales, etc.

19. WAYS TO FILE YOUR TAXES

20. FILING YOUR TAX RETURN  In the past, you would prepare your taxes and send your complete package in to the Internal Revenue Service (IRS)  Most people now use TurboTax, or another online tax service, to prepare their taxes and then e-file online with the IRS  You can also hire an accountant

21. TAX FORM ACTIVITY  http://apps.irs.gov/app/understandingTaxes/stud ent/simulations.jsp  Go to the link provided and complete the simulations listed below  Simulation 1 – Lawrence Red Owl  Simulation 2 – Cicely King  Simulation 3 – Tasha Miller  Simulation 7A – Monica Lindo