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What is the importance of paying taxes?

• Paying taxes is not important

• Paying taxes is important because businesses get to keep the money you pay in taxes

• Paying taxes is important because it funds government programs and services.

• Paying taxes is important because it helps you get rich.

What is the difference between direct and indirect taxes?

• Direct taxes are refunded, while indirect taxes are kept by the government.

• Direct taxes are only applicable to individuals, while indirect taxes are only applicable to businesses.

• Direct taxes are paid indirectly through the purchase of goods or services, while indirect taxes are paid directly to the government.

• Direct taxes are paid directly to the government, while indirect taxes are paid indirectly through the purchase of goods or services.

Match the following

• The income remaining after deductions and taxes are applied

• Gross Income

• The total income earned before deductions and taxes are applied

• Taxable Income

• Gross income minus adjustments to income

• Adjusted Gross Income

• Profits that result from the sale of an investment or property

• Net Income

• The amount of income that is used to calculate an individual's or a company's tax liability

• Capital Gains

Which of the following is considered taxable income?

• Gifts from family members.

• Life insurance payouts.

• Wages, salaries, and tips.

• Child support payments.

Wages, salary and tips are known as

• unearned income

• earned income

• disposable income

Income that has not been worked for such as interest, dividends, or gambling winnings

• disposable income

• unearned income

• earned income

• workers compensation

What is a tax credit?

• A form used to report income and taxes withheld by an employer.

• A reduction in the amount of taxes owed, for specific expenditures.

• A document showing how much you have earned in a year.

• A payment made to the government based on income.

What is a tax deduction?

• A reduction in the amount of income that is subject to tax, to encourage certain activities or investments.

• A direct reduction in tax owed, dollar for dollar.

• A form used to file income taxes.

• A payment made to the government based on income.

What does "withholdings" refer to in the context of income tax?

• The amount of tax owed at the end of the year.

• The amount of your income that is not subject to taxes.

• The amount of tax taken out of your paycheck and sent to the government by your employer.

• The amount of money you get back as a tax refund.

All those working in the United States pay the following taxes - Match the following

• A federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease

• Medicare

• A federal program that provides financial assistance to retired or disabled individuals

• FICA

• A state program that provides temporary financial assistance to eligible workers who have lost their job through no fault of their own

• Medicaid

• A joint federal and state program that helps with medical costs for some people with limited income and resources

• Unemployment Insurance

• A federal law that requires an employer

• Social Security