Financial Literacy and Understanding Your Paycheck

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Check-In with Coaches

What did you learn in your internship this week?

What was the best part of your week at internship?

What challenged and tested you?

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Did You Know?

Most developed nations pay more taxes than we do in the U.S. and nearly all provide universal healthcare.

A

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Paycheck Terms

• Break into groups of three, define the following terms using your own words, and give an example

• Gross Income

• Taxable Income

• Federal Income Tax

• State Income Tax

• Net Income

• Deductions

• FICA

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What Gets Taken Out of My Paycheck?

• Federal income tax

• Brackets

• State income tax

• Depends on the state: some are flat, some have brackets, and some have none

• FICA

• Social Security

• Medicare

• Deductions: Reduce taxable income

• Health Insurance

• 401K

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Marginal Tax Rates 2014

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Individual Practice

Before becoming president, President Obama worked at a Baskins Robbins in Hawaii, serving ice cream. He made minimum wage, which is now $7.25 in Hawaii. If he had this job today, at minimum wage and working 40 hours a week for 52 weeks, how much would he pay in federal income tax in a year?

Kanye West made $40 million in 2013. What what did he pay in federal income tax?