1. Taxes and Social Security

2. Understanding Taxes
Taxes are a form of payment to the government to support government services.
There are three types of government
Federal
Runs the country
State
Manages its own state
Local
Counties, cities, and towns

3. The IRS Internal Revenue Service
Collects federal taxes and oversees the federal tax system
Website provides all tax forms needed to file taxes
Taxes paid to the IRS go into the U.S. Treasury.

4. Types of Taxes
Income Tax
Social Security Tax
Sales Tax
Property Tax

5. Income Tax Tax you pay on the amount of money you earn.
It may be from a job or other source of income such as interest on savings or/and investments.
Calculated as a percentage of your total income earned.
This is the federal government’s main source of money.

6. Social Security Tax
Tax you pay so that you can receive certain benefits when you retire.

7. Sales Tax Tax paid when you purchase an item or service.
Calculated as a percentage of the price.
Goes to the state or local government.

8. Property Tax Usually paid yearly to the state or local government.
Based on the value of property – land or building – owned.
The main source of money for local government.

9. Where do tax dollars go? Education Transportation Safety Health
Includes public schools and libraries
Transportation
Roads, mass transit, ferries, airports, etc.
Safety
Includes law enforcement and fire protection
Health
Hospitals, medical research, etc.
Military
Postal

10. A program that provides benefits for people of all ages
Social Security
A program that provides benefits for people of all ages

11. Social Security Number
What is it for?
The government uses it to keep track of your contributions and work history.
Your employer will need it when you are hired.
Required to file taxes.

12. Types of Benefits Disability Retirement Medicare Unemployment
Worker’s Comp

13. Disability Benefits
Paid to someone who cannot work due to a physical or mental condition
Based on the worker’s average earnings

14. Retirement Benefits Paid to workers who retire
Higher earnings = Higher benefits
Current retirement age is 65

15. Medicare Pays medical costs for people who are over 65.
Covers hospitalization and other medical care.

16. Unemployment Benefits
Provides temporary income to workers who have lost their jobs.
To be eligible, you must have worked for a certain length of time and not have lost your job through fault of your own.
Funded by taxes both the employer and employee pay.

17. Worker’s Compensation
Paid to workers injured on the job.
Also, may be paid to dependents of workers killed on the job.
May include medical care and disability