Taxes and Social Security

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Taxes and Social Security
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Understanding Taxes

• Taxes are a form of payment to the government to
  support government services.
• There are three types of government
• Federal
• Runs the country
• State
• Manages its own state
• Local
• Counties, cities, and towns

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The IRS

• Internal Revenue
  Service
• Collects federal taxes
  and oversees the federal tax system
• Website provides all tax forms needed to file
  taxes
• Taxes paid to the IRS go into the U.S. Treasury.

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Types of Taxes

• Income Tax
• Social Security Tax
• Sales Tax
• Property Tax

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Income Tax

• Tax you pay on the amount of money you earn.
• It may be from a job or other source of income
  such as interest on savings or/and investments.

• Calculated as a percentage of your total income
  earned.
• This is the federal governments main source of
  money.

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Social Security Tax

• Tax you pay so that you can receive certain
  benefits when you retire.

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Sales Tax

• Tax paid when you purchase an item or service.
• Calculated as a percentage of the price.

• Goes to the state or local government.

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Property Tax

• Usually paid yearly to the state or local
  government.

• Based on the value of property land or building
  owned.
• The main source of money for local government.

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Where do tax dollars go?

• Education
• Includes public schools and libraries
• Transportation
• Roads, mass transit, ferries, airports, etc.
• Safety
• Includes law enforcement and fire protection
• Health
• Hospitals, medical research, etc.
• Military
• Postal

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Social Security

• A program that provides benefits for people of
  all ages

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Social Security Number

• What is it for?
• The government uses it to keep track of your
  contributions and work history.
• Your employer will need it when you are hired.
• Required to file
  taxes.

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Types of Benefits

• Disability
• Retirement
• Medicare
• Unemployment
• Workers Comp

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Disability Benefits

• Paid to someone who cannot work due to a physical
  or mental condition
• Based on the workers average earnings

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Retirement Benefits

• Paid to workers who retire
• Higher earnings Higher benefits
• Current retirement age is 65

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Medicare

• Pays medical costs for people who are over 65.

• Covers hospitalization and other medical care.

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Unemployment Benefits

• Provides temporary
  income to workers who
  have lost their jobs.
• To be eligible, you must
  have worked for a certain
  length of time and not
  have lost your job
  through fault
  of your own.
• Funded by taxes both the employer and employee
  pay.

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Workers Compensation

• Paid to workers injured on the job.
• Also, may be paid to dependents of workers killed
  on the job.
• May include medical care and disability