WHAT I KNOW ABOUT TAXES

WHAT I KNOW ABOUT TAXES

What are taxes?

Sum of money demanded by a government to
support itself

What is a community?

A group of people with common interest and
concern for the common good

What are the benefits of taxes?

You are better off being in a community than by
yourself

What is federal income tax?

Earned and unearned income
Higher income=more tax paid
Majority of people living in the U.S.
Operations of federal government

What is state income tax?

Earned and unearned income

Those living in states with a state income tax not all
states have an income tax

Varies by state but examples include state highways
and the operations of the state government

What is a payroll tax?

A tax earned income that supports the Social
Security and Medicare programs (also known as

FICA)

How do employers contribute
to payroll taxes?

Employers' Responsibility for FICA Payroll Taxes.
An employer's federal payroll tax responsibilities
include withholding from an employee's compensation
and paying an employer's contribution for Social Security

and Medicare taxes under the Federal
Insurance Contributions Act (FICA).

What is a property tax?

A tax on property such as land buildings (including
homes and motor vehicles)

What is a sales tax?

Tax on purchased goods and services

What is an excise tax?

Taxes collected from the seller or retailer and as
such often remain hidden in the price of a produce

or service

What are the two most
important things to know

about taxes?

Taxes play a role in both earning and spending

Understanding taxes is an important part of money
management