Presentation on theme: "TAXES AND YOUR PAYCHECK Consumer Economics. Your First Paycheck! You nailed the interview, got a call back and started your new job! You’ve been working."— Presentation transcript:
Your First Paycheck! You nailed the interview, got a call back and started your new job! You’ve been working hard for a couple of weeks, having a blast, but now you’re ready to get PAID!!! You worked 80 hours over 2 weeks for $25/hour. Payday comes around and your check is…. $2000………………….. SIKE!
What Happened?!?!?! Your paycheck was less than expected. Was there an error? Probably not. A variety of taxes and other expenses are taken out of each paycheck.
What gets taken out? Income Taxes Federal and State This is how the governments run and provide services Social Security/ Pension Will be paid back when you retire Medicare Will cover health expenses when retired Health/Dental Insurance Covers current health care expenses Union Dues Membership fees if you are in a union Retirement Plan/ Savings (401K, Roth IRA, 403B) Optional, but a good idea
About Taxes Individuals and businesses pay taxes to the government. This money is used to help the govt. operate and provide services. Taxes are collected by all levels of government (Federal, State, Local). Different types of taxes include: income, sales, property, excise, “sin,” estate, gift, and business taxes.
Federal Government Spending 1. Social Security and Medicare 2. Social Programs (Medicaid, food stamps, unemployment, social services) 3. National Defense, Veterans and Foreign Affairs 4. Physical, Human, and Community Development (agriculture, education, job training, science, infrastructure) 5. Interest on National Debt 6. Law Enforcement and General Government
State and Local Government Spending Building and maintaining roads Police and Fire depts. Criminal Justice system Building/operating schools State universities Supporting medical facilities
Your Tax Return Every year, Federal and State governments take out taxes as the year goes on. They either take too little, in which case you owe the government $ Or they take too much, and they owe you a tax refund! Either way, you need to fill out a Tax Return form and mail it to the IRS.