Welcome to class! Please sit down, clear your desk, and get out a writing utensil. Today we are learning

about Federal Income Taxes!

Bell Ringer!

1) Copy the objective: I will be able to explain how federal income tax affects standard of living, distribution of money, and individual households. 2) Tell me in two sentences what you know about taxes. 3) In your own words, explain the following power verbs and use them each in a sentence. Justify Predict

Federal Income Tax

Objective: I will be able to explain how federal income taxes affect standard of

living, distribution of money, and individual households.

Federal Income Tax: A tax collected by the United States Internal Revenue Service (IRS) on the annual incomes of individuals

and companies.

Activity!

Look at your "Household Information".

What percentage of income tax do you pay?

How much of your income (in dollars) will you pay to the federal government this year?

Total income X Tax% =

Example:

$50,000 X .15 = $750.00

Deductions. What are they? A Tax deduction is a reduction of the income subject to tax, for various items, especially expenses incurred to produce income.

- in other words -

A tax deduction can reduce, or decrease, the amount of income tax a person pays.

Examples:Child Tax Credit: reduces your income tax by $1000.00 per child. Earned Income Tax Credit: Available for households who make less than $50,000. (average deduction is $3,000.00).American Opportunity Tax Credit: college students can deduct $2,000.00 to help pay for books and supplies.

What do Federal Taxes pay for?

HTTP://WWW.WHITEHOUSE.GOV/2013-TAXRECEIPT

What do you think?