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Guided Notes-U2-Taxes

Last updated over 2 years ago
1 question
TAXES
45
Use the slides to help you fill in the blanks.

What are taxes?
Taxes are _______to the national, state and local revenue. Taxes are collected by the _______on worker's income and business profit or directly added to the cost of some goods and services.

Where does the tax money go?
_______- schools & libraries
_______- roadways, mass transit, airports
_______- police and fire
_______- hospitals, medical research
_______services
_______services

What are the six types of taxes?
_______ _______ _______ _______ _______ _______
* Sales Tax: Money paid on certain _______and varies by state and county. The base sales tax for Illinois is _______.Chicago's sales tax is _______.
* Excise Tax: Imposed to discourage the use of goods and services that could pose a_______. Examples are alcohol, cigarettes, tanning beds ...
* Gift Tax: Gifting someone a large sum of money of _______or above will incur a gift tax that the _______has to pay.
* Property tax: is the main source of funding for _______governments and _______. It's a _______of how much your property is worth.
* Interest income tax: is a tax on _______from savings accounts and investments (stocks, bonds, etc.). It's reported with a _______ form to the government by your bank.
* Payroll taxes: money taken out of your _______ and sent to the _______ by your employer.
  1. Why are payroll taxes withheld from each paycheck? to support the government and to pay for government services.
  2. What happens if payroll taxes were not withheld (taken out) from each paycheck? it would be difficult to save enough money each year to pay your taxes when there due.
  3. FICA stand for_______. It funds _______by withholding (taking out) 6.2% of each employee's pay stub. FICA also funds _______ by withholding (taking out)1.45% of each employee's pay stub.

What are the three tax systems?
_______ _______ _______

Progressive Tax: The _______money you make, the _______ you pay in taxes. Federal income tax is an example of a progressive tax.

Regressive Tax:Tax that claims a _______ percentage of money from people of _______ incomes than those of higher incomes. Sales tax is an example of a regressive tax.

Proportional Tax:
Tax that claims the _______percentage of income from people regardless of their income.
Illinois income tax (4.95%) is an example.

The IRS stands for _______.
  1. Their job is to _______ _______ _______.
Voluntary compliance: it is the _______ responsibility to report all income. This means you are responsible for _______.
Tax _______is the failure to report some or all of your income. It is illegal.