Entrepreneurship Taxes

Taxes – Fees charged by the government on products, activities, or income Different types of taxes: – Sales Tax – Excise Tax – Property Tax – Income Tax

Sales Taxes Sales Tax – Imposed by many states, counties, and cities on purchases See Lorain County Tax Rate

Excise Taxes Excise Taxes (Sin Tax) – A state or federal tax placed on non-essential consumer goods – Tobacco Products – Alcohol – Gasoline – Hotels – Sometimes Restaurants

Property Taxes Property Taxes – Tax paid by people who own items such as homes, land, and vehicles to the city and/or county where the property is located. – Roughly 30 % of the money collected is used to pay the cost of running public schools – Taxed is based on the Assessed Value (the amount the property is worth by city or county assessors)

Income Taxes Income Taxes – Tax paid on the money one earns from working – Charged by Federal, State, and Local Governments – Progressive Tax – Tax rates increase as the amount of taxable income increases – W4 Form – Employee’s Withholding Allowance Certificate – Tax Forms – 1040EZ, 1040A, and 1040

Income Taxes Exemptions – Items that can be deducted from one’s total income before taxes are assessed – Personal Exemptions – Exemption for someone who cannot be claimed as a dependant by another taxpayer – Dependent Exemption – Exemption for someone who relies on the taxpayer for support including food, clothing, and shelter

Income Taxes – Deductions – Amount subtracted from taxable income – Itemized Deductions – A list of items that can be deducted from total income – Standard Deduction – Flat amount deducted from total income

Withholdings Payroll Taxes – Deductions from the wage earner’s gross pay by the employers and used to fund federal government programs – Social Security Designed to provide retirement and disability income for those meeting the specified criteria – 6.2% – Medicare Pays for health insurance for citizens over age of 65 – 1.45%