1. Building Your Financial House WELCOME !

2. Program Objectives Become more comfortable talking about money issues
Identify the Framework for Building Your Financial House
Walk away with facts and skills needed to build your financial house
Gain confidence to make good money choices for your situation
Be in a better position for long-term financial stability and success.
Module 4: Check Taxes

3. Modules 1. Invest in Yourself 2. Maximize Earnings 3. Spend Sensibly
4. Check Taxes
5. Make Money Work
6. Protect Your Potential
7. Borrow to Grow
Module 4: Check Taxes

4. Recap: Spend Sensibly Last time, we talked about:
Money values & spending habits
Live within your means by prioritizing needs and wants
Developing and using a money map
Using government-insured accounts to manage spending
Module 3: Spend Sensibly

5. Did You Set A Goal?
Module 3: Spend Sensibly (PAGE SS-3)

6. Did You Practice?
Module 3: Spend Sensibly

7. Did You Learn More?
Module 3: Spend Sensibly (PAGE SS-30)

8. Did You Make Progress?
Module 3: Spend Sensibly

9. Module 4 Check Taxes
Module 4: Check Taxes

10. Checking the insulation can minimize a house’s hidden heat loss,
checking taxes can minimize dollars lost to overlooked deductions and credits. 4
Check Taxes
Adrian
Review where this module fits within the Framework for Building Your Financial House.
-Next-

11. Self-Assessment
Module 4: Check Taxes (PAGE CT-3)

12. Objectives Knowledge Actions Recognize the value in record keeping
Identify the key components of a tax return
Recognize the difference between total income and taxable income
Recognize the difference between total tax and withholding
Become aware of the various tax preparation methods and providers
Establish a manageable record keeping system
Identify credits and deductions overlooked or that may now qualify
Weigh the pros and cons of tax refunds and make adjustments to withholding if necessary
Select the appropriate tax preparer and avoid unnecessary fees
Module 4: Check Taxes

13. How is Your Record Keeping?
Module 4: Check Taxes (PAGE CT-5)

14. Record Keeping
You are buying a new car and want to trade in your current car.
Can you locate the title to the car?
Module 4: Check Taxes

15. Record Keeping Your big screen TV that you bought last month
isn’t working.
Can you find the instruction booklet,
warranty, and receipt?
Module 4: Check Taxes

16. Last night there was a fire
Record Keeping
Last night there was a fire
in your apartment.
Do you have a list and pictures of household items to use when filing an insurance claim?
Module 4: Check Taxes

17. Record Keeping What to keep: Vital Financial Legal Property Personal
Module 4: Check Taxes (PAGE CT-8)

18. The Bucket List
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19. Record Keeping How long to keep: Add a discard date
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20. Record Keeping Why keep good records? Non-discriminatory
Protection & proof
Helps with money management
Reduces stress
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21. Record Keeping Tools
Module 4: Check Taxes (ADDITIONAL RESOURCES)

22. Taxes
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23. Everyone Subject to Taxation
Who, What, When, and How
Who
Everyone Subject to Taxation
Module 4: Check Taxes (PAGE CT-10)

24. Taxes Assessed on Income
What
Taxes Assessed on Income
Module 4: Check Taxes

25. To Tax or Not to Tax? YES YES YES YES YES YES YES YES YES YES YES YES
Module 4: Check Taxes (PAGE CT-11)

26. penalties for underpayment
When
Pay As You Go
withheld from pay
-or-
estimated payments
BE AWARE
penalties for underpayment
Module 4: Check Taxes (PAGE CT-10)

27. Sample Tier and Rate Schedule
How – Progressive Tax
Sample Tier and Rate Schedule
Taxpayer 1 $50,000
Taxpayer 2 $100,000
Taxpayer 3 $125,000
$0 - $25,000
10%
$25,001 - $50,000
15%
$50,001 - $100,000
25%
$100,001 - $150,000
28%
$150,000+
33%
$50,000 x 15% = $7500
$100,000 x 25% = $25,000
$125,000 x 28% = $35,000
Module 4: Check Taxes (PAGE CT-12)

28. Progressive Tax Calculation
$2,500
$3,750
$12,500
$25,000 x 28% =
$7,000
$25,750
(21%)
$2,500
$3,750
$50,000 x 25% =
$12,500
$18,750
(19%)
$25,000 x 10% =
$2,500
$25,000 x 15% =
$3,750
$6,250
(13%)
10%
15%
25%
28%
Module 4: Check Taxes (PAGE CT-12)

29. Case Study
(Pages 18-23)
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30. Exploring the 1040
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31. Reviewing Key Components
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32. Filing Status and Exemptions
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33. Total Income
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34. Income
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35. Adjusted Gross Income (AGI)
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36. Adjustments
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37. Taxable Income
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38. Deductions (2015) the greater of… Itemized Standard
$6,300 for Single or Married, filing separately
$12,600 for Married, filing jointly or Qualifying Widow(er)
$9,250 for Head of Household
Itemized
Medical Expenses (over 10% of AGI)
Taxes Paid (state /local income, real estate, etc.)
Interest Paid (mortgage, investment, etc.)
Gifts to Charity
Casualty and Theft Losses
Job Expenses and Others (over 2% of AGI)
Module 4: Check Taxes

39. Deductions
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40. Taxable Income
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41. Exemptions
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42. Taxable Income
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43. Total vs. Taxable Income
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44. Tax
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45. Taxes
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46. Tax
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47. Total Tax
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48. Credits
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49. Total Tax
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50. Payments
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51. Refundable Credits
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52. Net Result
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53. Refunds
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54. Total Tax vs. Withholding
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55. Adjust Withholding
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56. Refund Recipe
HOWEVER YOU WANT: things that are nice-to-have (treats, gifts, home upgrades, etc.) 3 1
NOW: must-have necessities (debt, past-due bills, immediate repairs, etc.) 2
FOR LATER: the unexpected and the future (emergencies, car repairs, long-term savings, etc.)
Module 4: Check Taxes

57. Anna’s Refund Recipe ($6,166)3
HOWEVER SHE WANTED (20%):
How much? $1,200
For what? New TV: $ 800
Kids to spend: $ 400 1
NOW (45%):
How much? $2,805
For what?
Credit Card: $1,100
Medical bill: $ 400
Cable bill: $ 140
Internet bill: $ 100
Bank fees: $ 165
Glasses: $ 600
Clothes $ 300 2
FOR LATER (35%):
How much? $2,160
For what?
Rent reserve: $ 600
Back-to-School: $ 400
Holidays: $ 300
Car insurance $ 860
Module 4: Check Taxes

58. Tax Preparers Yourself: www.irs.gov/freefile
Free for those making less
than $62,000 through IRS
sponsored software programs
Online fillable forms for everyone
Commercial, step-by-step software
Inexpensive
Module 4: Check Taxes (PAGE CT-20)

59. Free Tax Preparers Volunteer Income Tax Assistance (VITA) /
Tax Counseling for the Elderly (TCE):
Free for those making less than $54,000 or for people age 60 and older
IRS trained volunteers
Module 4: Check Taxes (PAGE CT-21)

60. Paid Tax Preparers Enrolled Agents: Certified Public Accountants:
Federally licensed tax professional
Can represent client before the IRS
Cost varies with services provided
Certified Public Accountants:
Licensed by the state board of accountancy
Expensive/ varies with services provided
Module 4: Check Taxes (PAGE CT-20)

61. Paid Tax Preparers Chains: Usually trained through company tax courses
Convenient locations, targeting struggling consumers
Expensive/refund anticipation “products”
Module 4: Check Taxes (PAGE CT-20)

63. Check Taxes We’ve covered: The value in good record keeping
Key components of a tax return
Differences between total and taxable income; total tax and withholding
Recipes for tax refunds
Differences between tax preparers
Module 4: Check Taxes

64. Take Action – Set a Goal
Module 4: Check Taxes (PAGE CT-3)

65. Take Action – Worksheets
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66. Take Action – Learn More
Module 4: Check Taxes (PAGE CT-23)

67. Measure – Track Your Progress
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68. Please complete the session evaluation form.
(Page CT-25)
Module 4: Check Taxes (PAGE CT-25)

69. Building Your Financial House Thank You!