Presentation on theme: "Taxes and Social Security By: Graham, John, Kali, Shanzeh and Jaime."— Presentation transcript:
Taxes and Social Security By: Graham, John, Kali, Shanzeh and Jaime
Understanding Taxes Taxes are payments that you make to support the government and pay for government services. There are three levels of government: federal, state and local. ◦All three of these levels need funds to operate, so you pay taxes to all three. The Internal Revenue Service (IRS) is the agency that collects federal taxes and oversees the federal tax system. Taxes paid to the IRS go to the U.S. Treasury.
Types of Taxes Income taxes – you pay income tax on the money you make. Income taxes are the federal governments main source of money. Some states and cities also may have an income tax, but are at a much lower rate than the federal tax. Social Security taxes – workers pay Social Security taxes so that they can receive benefits when they retire. Employers withhold money from paychecks to pay Social Security taxes. Sales taxes – when you buy something, the salesperson may add sales tax to the price. These taxes go to the state and local governments. Property taxes – The main source of money for local governments is property taxes. These taxes are based on value of property—generally land and buildings.
Where do tax dollars go? Education-public schools and libraries Transportation-Roadways, mass transit, dams, airports etc. Safety- law enforcement and fire protection Health-hospitals, medical research studies etc. Military services Postal services
It’s Your Responsibility As a citizen of the States you have to split the bill for the services that the public government provides The problem with taxes is that people don’t agree on what is a fair split of the bill ◦Some people think rich people should pay a larger share of their income than low or middle class people ◦Some people object to paying for services they don’t use ◦Most people disagree with the way the government spends our tax dollars You can influence how federal, state, and local governments spend your tax money by voting Lawmakers at every level of government decide what taxes you must pay and how they are spent It is your responsibility to vote for officials who represent your beliefs
A Good Tax Systems What defines a good tax system is consistently argued about but people unanimously agree it includes the following features: Fair: Everyone who is able to pay should pay his or her share Clear and simple: Many people believe the present system is too complicated with rules and tax forms Timely: Taxes should be collected at a convenient time when everyone is able to pay them Stable: A tax system should be stable so that payers can predict how much they owe rather than have to constantly adjust budgeting when they hear that certain tax laws have changed Flexible: When necessary the Government should be able to adjust the tax system to bring in more or less income.
Understanding Federal Income Tax Returns To pay federal income tax, you must complete and file an income tax return each year. An income tax return is a form that shows how much you earned from working and made from other sources. The IRS can fine you if you fail to report some of your income, and fail to file your tax returns on time.
Form W-4 By looking at the information that you provided on your W-4, your employer will know how money to withhold. Write the number of deductions, you are allowed to claim. The higher the number, the less tax withheld. Some maybe exempt from paying taxes.
How Do You File a Return? If you’re single and earn at least $6,400 in a calendar year, you must file an income tax return. You have to mail your tax return to the IRS by April 15. A dependent is someone whom you support, such as a child.
Form W-2 & Form 1040EZ The W-2 is your Wage and Tax Statement form. Your employer will send you this form in January. The 1040EZ is your Income Tax Return form. Most young taxpayers can use this form for at least the first few years they file tax returns.
Tax Table The tax table helps you figure out the exact taxes you owe, which depends on your marital status, and the amount of dependents you have if any. A deduction is an expense that you are allowed to subtract from your income.
Career Focus: What is your key to success? Be honest, organized and punctual when handling the people and the government’s money Build relationships with people and insure that those who have had previous problems paying taxes get proper attention
Career Focus: What does your job entail? Serve as the mediator between the taxpayer and the government Travel to attend meetings to learn about new technicalities and tax laws
Career Focus: How does your workload vary? Majority of tax collectors are involved in finance and do not spend the duration of the year collecting taxes. Since tax season is between January and April the collecting takes place between those few months Tax collectors must be up-to-date with new laws involving tax so drastic changes might slow down the collecting process
Career Focus: What kind of training did you have? Preparation for the job consists of taking a 69- hour course, typically spread out over 11 weeks, starting in September. During the course aspiring tax collectors learn the ins and outs of the job including the tax code, H&R Block computer systems etc. A college education is favored and typical majors include business, finance, accounting and economics. Some states very on the amount of background training required
The Social Security Program: THE WORKS Social Security taxes are what pay for the benefits. Both employers and employees pay these taxes. Employers deduct Social Security tax from the employee’s (you) paycheck. If you are self employed, you must pay both the employee’s and employer’s share of the tax. Your Social Security Number is your personal identification number. The government uses it to track your contributions and work history. As you begin working, you start earning credits. These are measurements of how long you’ve worked. You have to get a certain amount of these to earn Social Security benefits. As you work, each year you gain.
The Benefits: There are several types of benefits and they even apply to people of any age: Disability Benefits: paid to disables workers. This means, the person is not able to work because of a physical or mental condition. Survivor’s Benefits: paid to the family of a worker who dies. Retirement Benefits: paid to workers who’ve retired. The higher average earnings when you worked, depends on the amount paid, but it is usually higher if you have a lot. Health Insurance Benefits: I paid to people who need hospitalization or other medical care. These benefits are called medicare, which covers nearly everyone who is 65+. Social Security is a Federal program. As a worker, you’re entitled to benefits from 2 state-run social security programs. Unemployment Insurance: provides temporary income to workers who have lost their jobs. You’re eligible depending on how long you’ve worked and not have lost your job because of your fault. Unemployment Insurance is funded by taxes both the employer and employee pay. Workers’ Compensation: benefits are paid to workers injured on the job and to the dependents of workers killed on the job. These benefits could include medical care, disability income and other benefits.
The Future of Social Security A very noted issue, the Social Security system is going broke ◦Social Security System is defined as taxes we pay to provide benefits for workers who have already retired Once a great system, the problem now is that: ◦ many people are living longer and receiving more benefits ◦ many are retiring early so they pay less in the system ◦The U.S. Birthrate is declining- there are fewer young workers to support the retired people in the future It is speculated that eventually money being paid out will exceed money coming in
The Future of Social Security Possible solutions to this problem ◦Increase taxes ◦Cut benefits In conclusion, the system needs to be fixed to better suit our country’s current situations To become better involved ◦Vote ◦Stay informed