Accounting grade 12

• Economie
• Secondary Education

Do you
know which government agency is
responsible for federal income tax laws
and collection?

1. Internal Revenue
2. Internal services
3. Internal service revenue
4. Internal Revenue Service

Appendix B

Pages A-12-A-17 

Objectives

• Determine the creation of federal tax system 
• Analyze the purpose of common federal tax forms
• Discuss the forms that are used by students

At its founding in 1776, this country did not have a federal personal income tax system. Individual states taxed their residents to raise revenue for needed expenditures. The first personal income tax was created in 1862 to finance the Civil War. A commission levied taxes on a small percentage

of people to generate needed revenue. However, this tax was abolished in 1872, soon after the war ended. 

A federal personal income tax was again

proposed in 1895 but was declared unconstitutional.

In 1913 Congress ratified the 16th Amendment to the Constitution allowing the federal government to levy a tax on individuals based on personal income. The income tax system was established under the principle of voluntary compliance. This means that all individual taxpayers are responsible for filing their tax return

How was the federal tax system created? What is voluntary compliance?

How do you think the federal government uses tax revenues?

1. funding for schools, roads
2. pay fees
3. pay the rents
4. Pay for licenses

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Name the different forms used for paying taxes.Also mention the purpose of each.

What is the purpose of a W-4 form?

1. how much to reduce
2. how much to pay
3. how much to withhold for federal income tax
4. how much to deduct

Which form is used by the students ?Why do the students pay taxes?

Can Randy Miles, who earns $115,000 per year in taxable income and $1,400 in taxable interest on his savings account, fi le a Form 1040EZ? Why or why not?

1. No. He earns more than $3000
2. No. He earns more than $100,000 taxable income.
3. yes. He earns more than $5000
4. No. He earns $8000

Write the main points of the lesson.