Name 10 things your

taxes pay for

The federal government of the United States imposes a
progressive tax on the taxable income of individuals,
corporations, trusts, and estates,
Some state and municipal governments also impose
income taxes.
The first Federal income tax was imposed during the
Civil War
•under Article I, section 8, clause 1 of the U.S. Constitution
•In the 1890s

•Sixteenth Amendment was ratified in 1913.

 FICA is the acronym for the Federal Insurance Contributions Act.
This act mandates that an employer withhold a set percentage of an
employee’s salary each pay period. FICA also requires that the
employer match the employee’s amount and contribute the money to
a government account known as the Social Security Trust Fund.
This fund provides retirement income, as well as disability
insurance, Medicare, and benefits for survivors
 6.2% of gross compensation up to a limit of $97,500 of
compensation
 The employer is also liable for separate 6.2%
 Self-employed people are responsible for the entire FICA
percentage of 12.4%.
 Medicare is the name given to a health insurance
program administered by the United States
government, covering people who are either age
65 and over, or who meet other special criteria.
 1.45% withheld from the worker and a matching
1.45% paid by the employer
 In the case of self-employed individuals, the tax is
2.9% of net earnings from self-employment
 The Internal Revenue Service (IRS) is the
United States federal government agency that
collects taxes and enforces the internal revenue
laws
 In 1862, during the Civil War, President Lincoln
and Congress created the office of Commissioner
of Internal Revenue and enacted an income tax to
pay war expenses . The position of Commissioner
exists today as the head of the Internal Revenue
Service
 Some of your wages are exempt from taxation
 Tax exemptions
 Allowances for dependants
 Deductions
 Standard or itemized
 Has anyone has ever seen a W-2?

 When do we receive a W-2 form?

 after the year ends, usually in January

 What is the purpose of the W-2 form?

 it tells the employee how much money was earned,
and how much money was withheld for taxes.
Box 1- Wages, tips, other
compensation:  This is the
amount that will be entered on
the wages line of your tax
return.
 
Box 2 - Federal income tax
withheld by your employer.
 
Box 3 = Social security tax
withheld
 
Box 6 - Medicate tax withheld.
 
Box 17 - State income tax.
 
Other information on the W-2:
Box 8 - Allocated tips.
 
Box 10 - Dependent care
benefits.  Total dependent care
benefits that were paid to you
by your employer or incurred
on your behalf.
 
 Complete the following :
 Earning Statement (answer questions)
 W-4 (complete the form)
 W-2 (answer questions)
 1040EZ (complete the form)