1. The facts on taxes… Who pays the most taxes?
The poorest half of the country (155 million people) 2%
The richest 10% of Americans (31 million people)
70%
People who make between $68,000 and $113,000 a year (100 million people)
15%

2. Doing Your Taxes!

3. Filing Your Taxes Key Terms:
W-2: the form your employer sends you that shows your total earnings and tax deductions for one year
Form 1099-INT: A form which shows interest you have earned from savings accounts
1040EZ – A simple tax form for people with typical income and few special circumstances
Most teenagers can use this form

4. W-2 and 1099-INT

5. Filing Your Taxes Key Terms:
Taxable Income: The amount of your income that the government can tax
Not always the same as how much money you made
Dependents: someone who is supported by a taxpayer (you are a dependent of your parents most likely)

6. Filing Your Taxes Key Terms:
Tax Deductions: expenses that reduce your taxable income
Charity donations
Interest on a home loan
Some college expenses
Standard Deduction: set amount the IRS allows to be deducted without listing the actual expenses
$6,100 for 2013 tax year
Most common for teens
Itemized Deduction: a list of all of your deductions
If you claim itemized deductions, you cannot claim the standard deduction
Not worth doing unless it will be more than the standard deduction

7. TAX TABLE

8. Filing Your Taxes Key Terms:
Tax credit: an amount that is subtracted from the final tax amount you owe
Some college expenses (tuition)
Child tax credit

9. Tax Deduction vs. Tax Credit
Lowers your taxable income
Total income = $4000
College expense deduction= $50
Taxable income = $3950
10% tax = $395
Gets taken out of the total tax amount you owe
Total income = $4000
10% tax = $400
College tuition tax credit = $50
New tax amount = $350

10. Filing Your Taxes Key Terms:
Tax refund: how much money the government owes you because you paid too much in taxes

11. Quick Review
What is the name of the form that shows how much you earned and how many taxes you paid in one year?
What two things help to lower how much you pay in taxes?
What do we call the amount that the government gives back to you because you paid too much in taxes?
W-2
Tax Deductions & Tax Credits
Tax Refund