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© Take Charge Today – February 2006– Planet Paycheck – Slide 1Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

Your Job & Taxes

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© Take Charge Today – February 2006– Planet Paycheck – Slide 2Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

Starting a New JobTo receive a paycheck, an employee

must:Complete a Form W-4

• Employee’s Withholding Allowance Certificate

• Determines the amount of money withheld for taxes

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© Take Charge Today – February 2006– Planet Paycheck – Slide 3Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

Completing a W-4

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© Take Charge Today – February 2006– Planet Paycheck – Slide 4Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

Form W-4 Allowances

Allowance

May claim an allowance

only if no one else claims that person

as a dependent

Dependent - person

who relies on

the taxpaye

r for financial support

Qualifying child

Qualifying adult relativeRule of

thumb = may (but not required) claim an

allowance for every

dependent

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© Take Charge Today – February 2006– Planet Paycheck – Slide 5Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

• The higher the number of allowances, the less taxes they take out. The lower the number, the more taxes out.

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© Take Charge Today – February 2006– Planet Paycheck – Slide 6Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

Starting a New JobComplete a Form I-9

• Used to prove the identity of people and avoid hiring non United States citizens

• Must provide at least 2 of the following

– passport– driver’s license– U.S. military card– Social Security card– birth certificate

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© Take Charge Today – February 2006– Planet Paycheck – Slide 7Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

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© Take Charge Today – February 2006– Planet Paycheck – Slide 8Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

Sample Paycheck StubTerrific Tacos

EmployeePaycheck, Patty

SSN/Employee Identification Number201-92-4856

Check #164

Check Amount (net income)$146.68

Employee Address293 Michael GroveBillings, MT 59102

 

  Pay Type-Gross Income

Deductions Current Year-to-date

 $180.00 Federal WithholdingState WithholdingFICA

$14.10$5.45$13.77

$296.10$130.80$330.48

  Totals $33.32 $757.38Pay Period 6/11/2007-6/25/2007

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© Take Charge Today – February 2006– Planet Paycheck – Slide 9Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

Taxes Deductions from your Paycheck

Income TaxesFederal• Largest

%State

Payroll TaxesSocial Securit

yMedica

re

Payroll tax – A tax on earned

income that supports the

Social Security and

Medicare programs

(also known as FICA)

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© Take Charge Today – February 2006– Planet Paycheck – Slide 10Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

Income taxIncome tax - tax on earned and unearned

income

Earned income -

money earned from working

for pay

Unearned income - income

received from sources other

than employmentExample: Wages

and salaries earned from employment

Example: Interest earned from a savings

account

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© Take Charge Today – February 2006– Planet Paycheck – Slide 11Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

What are benefits of being a part of these tax paying

communities?

Roads LibrariesMilitary for

national

securityPublic

schoolsPolice

and fire departm

ents

Recreation (parks,

trails)

?

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© Take Charge Today – February 2006– Planet Paycheck – Slide 12Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

“You are better off being in a community than by yourself”

As a community member you receive many benefits

you could not pay for individuallyTaxes are a way members

of a community provide for one another

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© Take Charge Today – February 2006– Planet Paycheck – Slide 13Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

What is Federal Taxes?

Purpose Tax charged

• Supports Federal Programs• Military• Education

Grants• Disasters• ResearchBenefits LINK

• 10% of earned income

• Changes based on your tax bracket

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© Take Charge Today – February 2006– Planet Paycheck – Slide 14Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

What is State Tax?

Purpose Tax charged• These support State

Gov’t. Programs• Head Start• Med Assistance

Programs• School Breakfast

Pro• NE Unemployment

Insur.NE Benefits LINK

• 5.5% of earned income

• Can changed based on location within the state

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© Take Charge Today – February 2006– Planet Paycheck – Slide 15Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

What is Social Security?

Purpose Tax charged

• Income for:• Retirees • People with

profound disability

• Children who have lost a parent

• A person with children who has experienced the death of a spouse

• 6.2% of earned income (decreased to 4.2% for 2011-12)

• Up to an annual maximum

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© Take Charge Today – February 2006– Planet Paycheck – Slide 16Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

What is Medicare?

Purpose Tax charged

• Helps pay for health care for senior citizens

• 1.45% of earned income• No limit

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© Take Charge Today – February 2006– Planet Paycheck – Slide 17Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

The form that an employer must send to an employee and the IRS at the end of the year. The W-2 form reports an employee's annual wages and the amount of taxes withheld from his or her paycheck.

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© Take Charge Today – February 2006– Planet Paycheck – Slide 18Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

1040EZ Form"income tax return for single and joint filers

with no dependents" "easy form"

• An alternative to the Internal Revenue Service's (IRS) 1040 income tax form – offers a faster and easier way to file

taxes• Meant for taxpayers with very basic

tax situations• Usually the first tax form filled out

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© Take Charge Today – February 2006– Planet Paycheck – Slide 19Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona

1040EZ cont.• In order to be eligible to use this

form the individual must have – a taxable income of less than $100,000– interest income of $1,500 or less– possess no dependents– no real estate assets– no tax shelters– no foreign income

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© Take Charge Today – February 2006– Planet Paycheck – Slide 20Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the

University of Arizona