Taxes and Social Security. Understanding Taxes Taxes are a form of payment to the government to...
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Transcript of Taxes and Social Security. Understanding Taxes Taxes are a form of payment to the government to...
Taxes and Social SecurityTaxes and Social Security
Understanding TaxesUnderstanding Taxes
Taxes are a form of payment to the government Taxes are a form of payment to the government to support government services.to support government services.
There are three types of governmentThere are three types of government FederalFederal
Runs the countryRuns the country
StateState Manages its own state Manages its own state
LocalLocal Counties, cities, and townsCounties, cities, and towns
The IRS The IRS
Internal Revenue Internal Revenue ServiceService Collects federal taxes Collects federal taxes
and oversees the federal tax systemand oversees the federal tax system Website provides all tax forms needed to file Website provides all tax forms needed to file
taxestaxes Taxes paid to the IRS go into the U.S. Taxes paid to the IRS go into the U.S.
Treasury.Treasury.
Types of TaxesTypes of Taxes
Income TaxIncome Tax Social Security TaxSocial Security Tax Sales TaxSales Tax Property TaxProperty Tax
Income TaxIncome Tax Tax you pay on the Tax you pay on the
amount of money you amount of money you earn.earn.
It may be from a job or It may be from a job or other source of income other source of income such as interest on such as interest on savings or/and savings or/and investments.investments. Calculated as a percentage Calculated as a percentage
of your total income earned. of your total income earned. This is the federal This is the federal
government’s main source government’s main source of money.of money.
Social Security TaxSocial Security Tax
Tax you pay so that you can receive Tax you pay so that you can receive certain benefits when you retire.certain benefits when you retire.
Sales TaxSales Tax
Tax paid when Tax paid when you purchase an you purchase an item or service.item or service.
Calculated as a Calculated as a percentage of the percentage of the price.price.
Goes to the state or Goes to the state or local government.local government.
Property TaxProperty Tax
Usually paid yearly to the Usually paid yearly to the state or local government.state or local government.
Based on the value of Based on the value of property – land or building property – land or building – owned.– owned.
The main source of money The main source of money for local government.for local government.
Where do tax dollars go?Where do tax dollars go?
EducationEducation Includes public schools and librariesIncludes public schools and libraries
TransportationTransportation Roads, mass transit, ferries, airports, etc.Roads, mass transit, ferries, airports, etc.
SafetySafety Includes law enforcement and fire protectionIncludes law enforcement and fire protection
HealthHealth Hospitals, medical research, etc.Hospitals, medical research, etc.
MilitaryMilitary PostalPostal
Social SecuritySocial SecurityA program that provides benefits A program that provides benefits
for people of all agesfor people of all ages
Social Security NumberSocial Security Number
What is it for?What is it for? The government uses it to keep track The government uses it to keep track
of your contributions and work history.of your contributions and work history. Your employer will need it when you Your employer will need it when you
are hired.are hired. Required to file Required to file
taxes.taxes.
Types of BenefitsTypes of Benefits
DisabilityDisability RetirementRetirement MedicareMedicare Unemployment Unemployment Worker’s CompWorker’s Comp
Disability BenefitsDisability Benefits
Paid to someone who cannot work due to Paid to someone who cannot work due to a physical or mental conditiona physical or mental condition
Based on the worker’s average earningsBased on the worker’s average earnings
Retirement BenefitsRetirement Benefits
Paid to workers who retirePaid to workers who retire Higher earnings = Higher benefitsHigher earnings = Higher benefits Current retirement age is 65Current retirement age is 65
MedicareMedicare
Pays medical costs Pays medical costs for people who are for people who are over 65.over 65.
Covers hospitalization Covers hospitalization and other medical care.and other medical care.
Unemployment BenefitsUnemployment Benefits
Provides temporary Provides temporary income to workers who income to workers who have lost their jobs. have lost their jobs.
To be eligible, you must To be eligible, you must have worked for a certain have worked for a certain length of time and not length of time and not have lost your job through have lost your job through fault of your own.fault of your own.
Funded by taxes both the employer and Funded by taxes both the employer and employee pay.employee pay.
Worker’s CompensationWorker’s Compensation
Paid to workers Paid to workers injured on the job.injured on the job.
Also, may be paid to Also, may be paid to dependents of dependents of workers killed on the workers killed on the job.job.
May include medical May include medical care and disabilitycare and disability