Warm-Up: Tax Trivia Challenge!

Instructions: Read each statement and decide if it is TRUE or FALSE. Circle your answer.

1. TRUE / FALSE: Taxes are completely optional; you only pay them if you want to.
   
   
   
   
2. TRUE / FALSE: The money collected from taxes is used to pay for things like roads, schools, and police departments.
   
   
   
   
3. TRUE / FALSE: Sales tax is a tax you pay on the income you earn from a job.
   
   
   
   
4. TRUE / FALSE: When you start your first job, your employer will automatically know exactly how much tax to take from your paycheck without any input from you.
   
   
   
   
5. TRUE / FALSE: April 15th is an important date related to taxes for many people.
   
   
   
   

Tax Talk: Adulting 101 - Teacher Script

Introduction & Warm-Up (15 minutes)

(Teacher says while students complete the Warm-Up: Tax Trivia)

"Good morning/afternoon, everyone! Today, we're diving into a topic that might seem a bit 'adult,' but trust me, it's super important for your financial future: taxes. Before we jump in, I want you to take a few minutes to complete this quick 'Tax Trivia Challenge' warm-up. Don't worry if you don't know all the answers; it's just a way to get us thinking!"

(After 5 minutes, collect warm-ups or have students keep them for review.)

"Alright, let's bring it back together. By the end of today's lesson, you'll be able to define taxes, understand why we pay them, identify different types of taxes, and get a basic grasp of how to file them and the forms you'll encounter. This knowledge is crucial because, like it or not, taxes will be a part of your financial life as you enter adulthood. Understanding them will empower you to make informed decisions and avoid unnecessary stress."

"Let's quickly go over the warm-up answers. Who can tell me if statement #1 is true or false? 'Taxes are completely optional; you only pay them if you want to.'"

(Facilitate quick review of warm-up answers.)

What Are Taxes & Their Purpose (15 minutes)

(Teacher displays Slide 2: What Are Taxes?)

"So, what exactly are taxes? Simply put, they are mandatory financial contributions that individuals and businesses pay to the government. Notice that word 'mandatory.' Taxes are not optional; they are required by law. Think of them as your contribution to society – a way for us all to pool resources for common good."

(Teacher displays Slide 3: Why Do We Pay Taxes?)

"Now, why do we pay them? Where does all that money go? Take a look at this slide. Taxes fund a vast array of public services that benefit everyone. Can anyone think of a service they use almost every day that is paid for by taxes?"

(Allow students to brainstorm and share examples: roads they drive on, schools they attend, public parks, police/fire services, libraries. Encourage a few responses.)

"Exactly! From the roads you drive on, to the schools you attend, to the police and fire departments that keep us safe, taxes make these things possible. It's truly an investment in our community."

(Turn and Talk)
"Now, turn to a partner and discuss: 'Without _____, the government wouldn't be able to provide _____.' Share your thoughts using this sentence frame." (2 minutes)

(Teacher displays Slide 4: The Purpose of Taxes)

"Beyond just funding services, taxes have other purposes too. They generate revenue for government functions, yes, but they can also be used to redistribute wealth through social programs, or even to influence behavior. Has anyone heard of a 'sin tax'? What do you think that might be?"

(Guide discussion to examples like taxes on tobacco or alcohol, explaining they aim to discourage consumption or fund related public health initiatives.)

Types of Taxes (20 minutes)

(Teacher displays Slide 5: Many Kinds of Taxes!)

"Now that we know what taxes are and why we pay them, let's explore the different kinds of taxes you'll encounter in your life. It's not just one type!"

(Teacher displays Slide 6: Income Tax)

"First up is Income Tax. This is a tax levied on the money you earn, whether from a job, investments, or other sources. It's collected by federal, most state, and sometimes local governments. A key concept here is the 'progressive tax system.' This generally means that the more income you earn, the higher percentage of that income you pay in taxes. So, federal income tax and state income tax are prime examples of this."

(Teacher displays Slide 7: Sales Tax)

"Next, we have Sales Tax. This is probably one you're very familiar with. It's a tax on the sale of goods and services, and consumers like you pay it. It's added to the price of items at the point of sale. Have you ever noticed that the price on the tag is often less than what you actually pay at the register? That difference is usually sales tax! This tax varies quite a bit by state and even by city or county."

(Teacher displays Slide 8: Property Tax)

"Property Tax is a tax assessed on real estate and sometimes other personal property. If you own a house or land in the future, you'll be paying property taxes. These are usually collected by local governments – your county or city – and they are a major source of funding for local services, especially schools. The amount you pay is based on the assessed value of the property."

(Teacher displays Slide 9: Excise Tax)

"Then there's Excise Tax. This is a special tax on specific goods or services, often things that are considered non-essential or that might have negative societal impacts. Think about gasoline, tobacco products, or alcoholic beverages. These taxes are included in the price you pay for these items. They can be used to discourage consumption or to generate revenue for specific programs related to those goods."

(Teacher displays Slide 10: Payroll Taxes)

"When you start working, you'll see Payroll Taxes deducted directly from your paycheck. These are taxes withheld by your employer, and both you (the employee) and your employer contribute to them. They fund important government programs like Social Security, which provides retirement and disability benefits, and Medicare, which helps with healthcare costs. You'll often see these referred to as FICA taxes on your pay stub."

(Stop and Jot)
"Take a moment to 'Stop and Jot' down an example of a tax you've encountered or heard about in your daily life. Why do you think that specific item or service is taxed?" (2 minutes)

(Teacher displays Slide 11: Other Taxes You Might Encounter)

"There are other types of taxes too, though you might not encounter them as frequently. Things like estate tax on inherited property, gift tax on large gifts, or capital gains tax on profits from selling investments. These show you just how many ways governments collect revenue!"

Tax Filing Basics & Forms (20 minutes)

(Teacher displays Slide 12: It's Tax Time! (Eventually))

"Alright, so you've started earning money. What next? Eventually, you will need to file taxes. This means reporting your income to the government so they can figure out how much tax you actually owe or if you're due a refund. The big deadline for filing federal income tax returns is typically April 15th each year. Mark that on your future calendars!"

(Teacher displays Slide 13: Why File?)

"Why bother? Why file at all? First, it's the law if your income is above a certain amount. Second, if you've had too much tax withheld from your pay throughout the year, filing is how you get your refund back! Third, you want to avoid penalties – not filing or filing late can lead to fines and interest. And finally, establishing a tax history is important for big financial steps later in life, like getting loans or a mortgage."

(Teacher displays Slide 14: Tax Forms: W-4)

"Let's look at some important forms you'll deal with. When you start a new job, one of the first things you'll fill out is a W-4 Form. This form tells your employer how much federal income tax to withhold from each of your paychecks. Getting this right is important because it directly affects your 'net pay' – your take-home money. If you have too little withheld, you might owe taxes at the end of the year. If you have too much, you'll get a bigger refund, but you'll have less money in your pocket throughout the year."

(Teacher displays Slide 15: Tax Forms: W-2)

"Every year, usually by January 31st, your employer will send you a W-2 Form. This is super important! The W-2 reports your annual wages and all the taxes that were already withheld from your paycheck for the entire year. You absolutely need this form to file your income tax return."

(Teacher displays Slide 16: Tax Forms: Form 1040)

"The granddaddy of all personal tax forms is the Form 1040: U.S. Individual Income Tax Return. This is the main form individuals use to file their federal income tax return. It's where you pull together all the information from your W-2s and other income sources, calculate your total tax liability, and claim any deductions or credits you're eligible for."

(Introduce Tax Talk: Vocabulary)
"As we move forward, remember you have a Tax Talk: Vocabulary list available. It defines these key terms and even includes sentence frames to help you remember them. It will be a great resource for you!"

(Teacher displays Slide 17: Gross vs. Net Pay)

"Let's talk about your paycheck. You'll often hear the terms Gross Pay and Net Pay. Your gross pay is your total earnings before any deductions are taken out. Your net pay, also known as your take-home pay, is what you actually receive after all taxes and other deductions have been withheld. Taxes are a huge reason why your net pay is almost always less than your gross pay!"

(Teacher displays Slide 18: Common Payroll Deductions)

"Here's a quick look at common things that come out of your paycheck. Besides federal and state income tax, you'll see those Social Security and Medicare taxes we talked about. You might also have deductions for health insurance premiums or retirement contributions if you sign up for those benefits. It's always a good idea to check your pay stub so you understand exactly where your money is going!"

Game: Tax Jeopardy! (15 minutes)

"Alright, who's ready for some friendly competition? It's time to play Game: Tax Jeopardy! I'm going to divide you into teams. Remember the rules: choose a category and point value, and your answer must be in the form of a question. This is a great way to review all the important tax terms and concepts we've covered today!"

(Facilitate the game. Keep track of scores on the board. After the game, or if time is running short, review any questions that were particularly challenging for the class.)

"Great job, everyone! That was an excellent display of your new tax knowledge. Did anyone find a particular category or question challenging? What did you learn or reinforce during the game?"

Cool-Down & Wrap-Up (5 minutes)

(Teacher displays Slide 19: You're a Tax Expert (Almost)!)

"Great work today, everyone! You've learned a ton about taxes. Before we go, please complete this Cool-Down: Taxing Thoughts as your exit ticket. It's a chance for you to reflect on what you learned."

(Distribute cool-down sheets or display on screen.)

"To recap, remember that taxes fund essential public services, there are many types like income and sales tax, filing taxes is a legal requirement, and forms like the W-4, W-2, and 1040 are key. And always remember the difference between gross and net pay! You've taken a big step today in becoming more financially literate. Any final questions before you head out?"

**(Collect cool-downs.)"

Cool-Down: Taxing Thoughts

Instructions: Please answer the following questions to reflect on what you learned today.

1. What is one new thing you learned about taxes today that you didn't know before?
   
   
   
   
   
   

2. Why do you think it's important for you to understand taxes as you get older?
   
   
   
   
   
   

3. What is one question you still have about taxes?
   
   
   
   
   
   

Tax Talk: Key Vocabulary

Instructions: Use this list to help you understand important terms related to taxes.

• Tax: A mandatory financial contribution required by the government from individuals and businesses to fund public services.
  • Sentence Frame: "Without _____, the government wouldn't be able to provide _____."
    
    
    
• Income Tax: A tax levied on an individual's or company's earnings.
  • Sentence Frame: "My first paycheck will have _____ withheld for _____."
    
    
    
• Sales Tax: A tax on the sale of goods and services, added at the point of purchase.
  • Sentence Frame: "When I buy a new _____, I also pay _____."
    
    
    
• Property Tax: A tax assessed on real estate and sometimes personal property, typically funding local services.
  • Sentence Frame: "Homeowners pay _____ to help fund local services like _____."
    
    
    
• Excise Tax: A tax on specific goods or services, often non-essential items like gasoline, tobacco, or alcohol.
  • Sentence Frame: "The price of _____ includes an excise tax, which aims to _____."
    
    
    
• Payroll Taxes: Taxes withheld from an employee's paycheck that fund specific government programs like Social Security and Medicare.
  • Sentence Frame: "_____ and _____ are examples of payroll taxes that come out of my paycheck."
    
    
    
• W-4 Form: An employee's withholding certificate, used to tell an employer how much federal income tax to withhold from paychecks.
  • Sentence Frame: "When I start my job, I will fill out a _____ to determine _____."
    
    
    
• W-2 Form: A wage and tax statement sent by employers each year, reporting annual wages and taxes withheld.
  • Sentence Frame: "I will need my _____ from my employer to file my _____."
    
    
    
• Form 1040: The main U.S. Individual Income Tax Return form used to file federal income taxes.
  • Sentence Frame: "The _____ is the primary form used by individuals to report their income to the _____."
    
    
    
• Gross Pay: An individual's total earnings before any deductions are taken out.
  • Sentence Frame: "My _____ is higher than my net pay because _____."
    
    
    
• Net Pay: An individual's earnings after all taxes and other deductions have been withheld (also known as take-home pay).
  • Sentence Frame: "After taxes, my _____ is the actual amount I receive from my employer."
    
    
    

Game: Tax Jeopardy!

Instructions: Get ready to test your tax knowledge! Your teacher will divide you into teams. One person from each team will choose a category and a point value. Your teacher will read the question, and your team will have a set amount of time to discuss and provide the correct answer in the form of a question. Good luck!

Categories & Point Values

What Are Taxes?

• 100 Points: What are mandatory financial contributions paid to the government?
  Answer: What are taxes?
  
  
  
• 200 Points: What is one main purpose of taxes that involves funding roads and schools?
  Answer: What is funding public services?
  
  
  
• 300 Points: Besides funding services, what is another purpose of taxes that involves discouraging certain behaviors?
  Answer: What is influencing behavior (e.g., sin taxes)?
  
  
  
• 400 Points: What term describes taxes as not being optional, but rather required by law?
  Answer: What is mandatory?
  
  
  
• 500 Points: What do taxes help the government collect to pay for public expenditures?
  Answer: What is revenue?
  
  
  

Types of Taxes

• 100 Points: What kind of tax is taken from the money you earn from a job?
  Answer: What is income tax?
  
  
  
• 200 Points: What tax is added to the price of items you buy at a store?
  Answer: What is sales tax?
  
  
  
• 300 Points: What type of tax do homeowners pay on the value of their property?
  Answer: What is property tax?
  
  
  
• 400 Points: What special taxes are often on goods like gasoline, tobacco, or alcohol?
  Answer: What are excise taxes?
  
  
  
• 500 Points: What taxes are withheld from your paycheck to fund Social Security and Medicare?
  Answer: What are payroll taxes?
  
  
  

Tax Forms & Filing

• 100 Points: What is the form you fill out for your employer to determine how much tax to withhold from your paycheck?
  Answer: What is a W-4 Form?
  
  
  
• 200 Points: What form does your employer send you by January 31st each year, summarizing your wages and taxes withheld?
  Answer: What is a W-2 Form?
  
  
  
• 300 Points: What is the main form individuals use to file their federal income tax return?
  Answer: What is Form 1040?
  
  
  
• 400 Points: What is the typical deadline for filing federal income tax returns each year?
  Answer: What is April 15th?
  
  
  
• 500 Points: What happens if you overpay taxes throughout the year?
  Answer: What is getting a refund?
  
  
  

Paycheck Power

• 100 Points: What is your total earnings before any deductions are taken out?
  Answer: What is gross pay?
  
  
  
• 200 Points: What is your take-home pay after all taxes and deductions have been withheld?
  Answer: What is net pay?
  
  
  
• 300 Points: Name two common payroll deductions other than federal income tax.
  Answer: What are Social Security and Medicare taxes (or state income tax, health insurance, retirement contributions)?
  
  
  
• 400 Points: Why is your gross pay typically higher than your net pay?
  Answer: What is because taxes and other deductions are subtracted from gross pay to get net pay?
  
  
  
• 500 Points: What is an important step to take when you get your paycheck to understand where your money is going?
  Answer: What is checking your pay stub?