Chap004.Fall04

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Unformatted text preview: Taxes Five Types of Taxes Taxes on earnings Income tax (progressive) The more you make the more you pay Employment taxes Use taxes –don’t wanna pay? don’t use it Toll roads Airport landing fees 6 Federal Taxes: The Big Picture Federal Taxes: The Big Picture Totals 2.5 Trillion Dollars 1,371 784 281 6.2% Soc. Sec. + 1.45% Medicare for taxpayers plus employer match (15.3% total) 56 12 2 Everyday people (us) Source: IRS Statistics (In Billions of Dollars) 7 Fiscal Policy Fiscal Policy Congress determines fiscal policy by passing tax laws to raise revenues, and then appropriates spending, as approved by the President Congress uses fiscal policy to encourage economic and social behaviors Home ownership Credit card debt Savings initiatives 8 First Start With Good Records First Start With Good Records Current tax forms and instruction booklets Social security numbers Copy of previous year’s returns W­2 form from employer 1099 forms (interest, self employment) 1098 (mortgage interest paid) Receipts, documentation Investment & business expense documents 9 IRS Matching Program IRS Matching Program All records sent to the IRS such as W­2s and 1099s are matched by computer against YOUR tax return based on social security number provided…be sure these documents match the amounts on your return 10 Taxable Income Recap Taxable Income Recap Greater of Gross Income Schedule A Minus Adjustments = AGI Minus or Minus Standard Deduction Exe...
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This document was uploaded on 02/12/2014.

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