• Understanding Taxes Unit and Lessons 

     

    Lesson 1: Taxes in US History 

    Learning Target: I will learn the evolution of the tax system in the United States.

    Vocabulary:

    Revenue-The income the nation collections from taxes

    Tariffs- A tax on products imported from foreign countries.

    Excise Tax: A tax on the sale or use of specific products or transactions.

     

    Activity: 

    Read Understanding Taxes written by the IRS and answer the questions. 

     

    https://apps.irs.gov/app/understandingTaxes/student/whys_thm02_les01.jsp

     

    Activity: 

    Answer the questions in complete sentences. 

    1.What are the three goals of lawmakers when they create taxes? 

    1. Tax advisor to President Washington: "One way to meet our bills is to tax whiskey. We must repay our war debt to other nations to show the world that our government can survive." What was the reason for the whiskey tax? A.To raise revenue B. To influence behavior. C. To be fair.
    1. When the constitution was ratified how did the government raise revenue?
    2. Why was a tax on income created in 1862? 
    3. What is the 16th Amendment of the Constitution?

     

    Lesson 2: Government Spending 


    Learning Target: I will learn the evolution of the tax system in the United States.

    Vocabulary:

    Infographic-A collection of imagery, charts, and minimal text that gives an easy to understand overview of a topic. 

    Government procurement-Purchasing goods and services for a public agency

     

    Activity: 

    Read an article from Infographic Journal. The title of the article is “Government Spending Public-to-Private – Where the 2020 Budget Is Going to Be Spent”

    by Irma Wallace | Nov 14, 2019 | Animated Infographics, Finance & Money Infographics

     

    Activity: 

    Answer the questions in complete sentences. 

    1.The healthcare budget consists of 7 sections. What are the 7 sections? 

    2.What are the top three expenses the government pays for with our tax dollars?



    Lesson 3: Wages and Deductions 

     

    Learning Target: I will learn how to read a pay stub. 

     

    Vocabulary:

     

    Payroll deductions- are amounts taken out of an employee’s paycheck each pay period.

     

    Wages-Form of income people receive for the work they do

     

    Gross Pay-The amount people earn per pay period before any deductions or taxes are paid.


    Net Pay-Gross pay minus deductions and taxes.

     

    Activity: 

    Watch How to Read Your Pay Stub

    On Edpuzzle.com.

    https://edpuzzle.com/media/5c1838585c0e2640f16a13f0

     

    Activity: 

    Analyze the Earnings Statement below. 

     

    1. What was his gross wages for the pay period?

     

    1. What type of deductions did they take from his pay? 

     

    1. What was his net pay?



    Lesson 4 

    Types of Taxes

    The local, state and federal government collects revenue through different types of taxes. 

    Personal income tax

     The individual who earns the income must pay tax on that income.

    Property tax

     A tax on real estate such as property, home, or some other building. Property taxes  are an important source of revenue for the local government.

    Sales tax 

    The amount of sales and taxes we pay is based on our purchase of certain goods and services. Applies to most products we buy.

    Excise taxes

    Applies only to specific goods such as tires, gasoline, cigarettes, liquor, and fur. One example is on gasoline, the people who buy the most gasoline use the roads the most. The tax money is used to repair the highways.

    Social security tax

    Provides disability and retirement benefits for most working people. 

    Estate Tax

    A tax on wealth passed on from one person to another. Estate taxes cover wealth that changes hands at the death of the wealth holder. 


    Gift Tax

    Gift taxes cover transfers of wealth from one living person to another.

    Name that Tax

    Read the statement and decide which tax the statement is describing. 

     

    1.Johnston County charges the Rodriguez family a tax on the land that their house is on, what type of tax is this? 



    2.Nathan earned $75,000 as a salesperson. He paid the federal government $11,000 in taxes on the money he earned. What type of tax is this? 

     

    1. If your aunt dies and leaves you her riches you would be charged what kind of tax? 

     

    1. Leo gets charged a tax everytime he buys a new piece of clothing. What type of tax does he get charged for his purchase?

     

    Taxes in Your Parents’ Lives

    You can learn about taxes from your parents. Here is a list of questions you can ask them about taxes. 

    1. How much do you pay in property taxes each year? 
    2. How much is your vehicle property tax each year? 
    3. April 15 is the deadline for US citizens to file taxes with the exception of this year due to the virus. The deadline is July 15, 2020. 

    Did your parents file their taxes? 


    Lesson 5: Your Role as a Taxpayer

    Lesson 4: Your Role as a Taxpayer 


    Learning Target: I will about my responsibilities as a taxpayer.

    Vocabulary:

    voluntary compliance-A system of compliance that relies on individual citizens to report their income freely and voluntarily, calculate their tax liability correctly, and file a tax return on time.

    tax avoidance-An action taken to lessen tax liability and maximize after-tax income.

    tax evasion-A failure to pay or a deliberate underpayment of taxes.

    US Income Tax System

    Written by the IRS 

    April 15th is the deadline for US citizens to file their income taxes with the IRS or Internal Revenue Service.  The U.S. income tax system is based on the idea of voluntary compliance; it is the taxpayer's responsibility to report all income. Tax evasion is illegal. Some people try to evade paying taxes by failing to report all or some of their income. Money-making activities that aren't reported to the government are part of an underground economy. If taxpayers fail to pay what officials say they owe, the IRS can collect back taxes and assess a penalty. Tax avoidance is perfectly legal. The IRS allows taxpayers to claim certain deductions, credits, and adjustments to income. For instance, some homeowners can claim a deduction for interest they pay on a home mortgage. Many people pay more federal income tax than necessary because they misunderstand tax laws and fail to keep good records.

     

    Tax Avoidance vs Tax Evasion 

    Tax avoidance is perfectly legal and encouraged by the IRS, but tax evasion is against the law. Classify the tactics below as examples of Tax Avoidance or Tax Evasion by clicking on the correct answer. To assess your answers, click the Check My Answers button at the bottom of the page.

    1) Keeping a log of business expenses 

     

    A. Tax Avoidance

     
     

    B. Tax Evasion

     

    2) Ignoring earnings from lawn mowing

     

    A. Tax Avoidance

     
     

    B. Tax Evasion

     

    3) Not reporting interest earned on savings account

     

    A. Tax Avoidance

     
     

    B. Tax Evasion

     

    4) Keeping a log of contributions to charity 

     

    A. Tax Avoidance

     
     

    B. Tax Evasion

     

    5) Not reporting tips 

     

    A. Tax Avoidance

     
     

    B. Tax Evasion

     

    6) Claiming your dependents as tax deductions 

     

    A. Tax Avoidance

     
     

    B. Tax Evasion