Wise Financial Literacy Certification Outline Brittany Morgan Money… What is money and why is it important? Money is the current medium of exchange and money is like the importance of food for a human, without food you can’t survive just like you can’t survive without money What is medium of exchange? intermediary instrument used to facilitate the sale, purchase or trade of goods between parties… not backed by gold What roles do the U.S Department of Treasury have? They do all the printing, minting currency through the Bureau of Engraving and the U.S. Also they collect taxes through the IRS What's the connection between money, income, savings, spending, and financial literacy? They all determine your financial plan. The amount of money you have in your saving or income you make is the amount you have to spend for your necessities What are some methods for receiving or paying for goods and services which is leading to a cashless society? ● Gift cards ● Credit cards ● Debit Cards ● Electronic transfers &’ etc… What is a tax and the general purpose of taxes? Taxes are what you pay to the local, state, and Federal government. It is the government income and they use the money within your community (ex: schools, roads, services) Name each type of tax and define it. Income tax - Tax based on your earnings Sales tax - based on your spendings Property tax- based on wages Payroll tax- people who make higher earnings has to pay higher taxes Regressive tax- another term for sales tax
Who has the power to assesses taxes? The IRS has the power to assess taxes How does the graduated income tax system work? Your tax bracket becomes progressively higher. High income taxpayers can afford higher tax rates and lower income taxpayers pay not just lower tax rates, but a lower percentage of the income they do have. What are gross wages and how are they calculated? Gross pay is the total amount of money you make before taxes or any other deductions subtracted What’s the difference between paycheck and pay stub? A paycheck is a method in which employees are paid by and a paystub typically details the gross income, tax deductions, and any other deductions you may have ● Inflation occurs when a bunch of prices rise, not just one ★ Mandatory vs. optional payroll deductions ❖ Mandatory taxes include Federal, State, Social Security, and Medicare ❖ Court mandated deductions such as: child support and garnishments ❖ Optional deductions include automatic savings, contributions to the 401(k) plans that are taken out of gross pay, and life insurance What happens to a net pay and/or gross pay when there is an increase or decrease in exemptions? You either gain or lose some of your income due to an increase or decrease in exemptions.
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- Fall '19