Lesson 3 - Overview

Lesson 3 - Taxes in Your Financial Plan

Objectives

Upon successful completion of this lesson, students will be able to:

LO3.1	Identify the major taxes paid by people in our society.
LO3.2	Calculate taxable income and the amount owed for federal income tax.
LO3.3	Prepare a federal income tax return.
LO3.4	Select appropriate tax strategies for various life situations.

Overview

Taxes are an everyday financial fact of life. You pay taxes when you get a paycheck or make a purchase. However, most people concern themselves with taxes only immediately before April 15. Tax planning should be an ongoing process.

Each year, the Tax Foundation determines how long the average person works to pay taxes. In recent years, “Tax Freedom Day” came in mid-April. This means that the time that elapsed from January 1 until mid-April represents the portion of the year people work to pay their taxes.

Tax planning starts with knowing current tax laws, next maintaining complete and appropriate tax records, then making purchase and investment decisions that can reduce your tax liability. Your primary goal should be to pay your fair share of taxes while taking advantage of appropriate tax benefits.

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