Module 9
Taxes & Income
Everyone tells you that saving is critical for the future and that investing is a way to build true wealth, but what about investing in yourself?
Education is an asset because it helps increase your potential earnings throughout your life-time! This module explores how we can finance things like college to make them more accessible and elevate your future career earnings!
Module At A Glance
Grade Levels:
9th -12th
Est. Length:
2-4 Hours (21 slides)
Activities:
5 Activites
Articles:
8 Articles
Languages:
English & Spanish
Curriculum Fit:
Math, Business, Economics, CTE, Social Studies
Standards Alignment:
CEE National Standards, Jump$tart National Standards & Relevant State Standards
Guiding Questions
- What happens when I get my first job and receive my first paycheck?
- Are there different types of income and do they have different tax rates?
- What are different ways to lower my taxable income?
- What happens if I don’t pay my taxes?
- How does the economy impact your career & ability to switch jobs?
- What is opportunity cost and how can it impact the way you make decisions?
- Is college worth the investment to earn more?
Enduring Understandings
- Taxes are an inescapable part of earning income, and it’s important to pay them or else you can face fines and considerable jail time.
- Capital gains taxes are considerably lower than income taxes.
- Avoiding taxes is illegal and you can go to jail for tax evasion if you do not pay up!
- Investing in yourself by developing new skills and obtaining higher education pays off.
- Sometimes switching jobs can be the best choice for your career.
- Donating to charity is just one way you can lower your taxable income.
Module Vocab & Key Topics
- Investing
- The act of allocating money or capital to an asset or endeavor with the expectation of generating a return on investment (ROI). Investing aims for long-term wealth accumulation.
- Savings
- Money set aside for future use, often stored in a low-risk, easily accessible account like a savings account. Unlike investing, savings don't typically generate significant returns.
- Income Tax
- Taxes levied by the government on the money earned by individuals or businesses. Income tax is a primary source of revenue for the government.
- Capital Gains Tax
- Taxes on the profit made from selling an asset like stocks, real estate, or other investments. Capital gains tax rates are usually lower than income tax rates.
- Gross Income
- The total amount of money someone earns before any taxes or deductions are applied. It includes wages, bonuses, dividends, and other sources of income.
- Net Income
- The amount of money left after all taxes and expenses have been deducted from gross income. Net income reflects the true earnings that can be spent or saved.
- Tax Evasion
- The illegal act of deliberately not paying taxes owed to the government. Tax evasion can result in hefty fines and imprisonment.
- Tax Basis
- The initial value of an asset for tax purposes, usually the purchase price, which is used to calculate capital gains or losses.
- Realized Gains
- Profits from investments that have been sold. Realized gains are subject to capital gains tax.
- Unrealized Gains
- Potential profits from investments that are still owned. Unrealized gains are not taxed until the asset is sold.
- Payroll Deductions
- Amounts subtracted from an employee's paycheck for various reasons, including taxes, insurance, and retirement contributions. Understanding payroll deductions helps in budgeting.
- Charitable Donation
- Giving money, goods, or time to a non-profit organization. Charitable donations may be tax-deductible, reducing one's taxable income.
