Summary of Taxes
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Summary of Taxes
You should now have a better sense of what you’re getting for all those hours you put into your taxes. Taxes are a fact of life for most people. Employees must pay a variety of taxes that are deducted from their paychecks, which include federal, state, and local income taxes and Medicare and Social Security taxes. Employers must match employee payments for Medicare and Social Security and also pay federal and state unemployment taxes.
The amount of federal, state, and local payroll tax you must pay depends on several factors, including your filing status and your tax rate. Medicare and Social Security tax rates, however, are fixed and help support programs that provide for retired and disabled people.
Things to do
- Review your W-4 to see if you need to adjust your withholding.
- Fill out the sample 1040 tax form. Check your answers against the ones provided in the link.
- Create a file (hard copy or electronic) for each tax year and keep all of the tax documents you receive in the file. It will keep you organized so completing your tax return is easy.
What you have learned
- Payroll Taxes: Social Security and Medicare
- Federal and State Income Taxes
- Ways to Lower Your Income Taxes
- Your Tax Return
- Exemptions, Deductions, Adjustments, and Credits on Your Income Tax Form
- Tax Simulation Activity
