Suggested Money Lesson Plan
for this Tax Worksheet
This lesson covers the W-2 IRS tax form.
The W-2 is an important tax form that everyone
needs to understand. The W-2 is a wage and tax statement,
since it shows income and taxes paid during the year. The W-2
lists the taxes withheld by your employer. Each employee must
receive this form by their employers at the beginning of the year.
For each employer you worked for, you will receive a W-2 statement.
Here is a sample W-2 statement: (Click
here for full size blank W-2 sample)
Important information on the W-2 include:
Box 1- Wages, tips, other compensation:
This is the amount that will be entered on the wages line of your
tax return.
Box 2 - Federal income tax withheld by your
employer.
Box 3 = Social security tax withheld
Box 6 - Medicate tax withheld.
Box 17 - State income tax.
Other information on the W-2:
Box 8 - Allocated tips.
Box 10 - Dependent care benefits. Total
dependent care benefits that were paid to you by your employer or
incurred on your behalf.
Lesson
Print and hand out a copy of the W-2 form to the students and ask
if anyone has ever seen a W-2?
When do we receive a W-2 form? (after the year
ends, usually in January)
What is the purpose of the W-2 form? (it tells
the employee how much money was earned, and how much money was
withheld for taxes).
Explain to them each of the lines on the form. Also
review
some terms such as IRS, W-2, Gross Income, etc.
Once you have stepped through a W-2, print out
the worksheet below and allow each student to answer the questions
using the information provided in the worksheet.
Other Notes:
Make sure the social security number on your W-2
matches your actual social security number.
If you ever move, be sure to tell anyone that
employed you during the year your new address, to be sure of
receiving all your W-2's.
Terms to Understand:
Gross Income - this is income before all taxes,
and may be found in box 1.
Net Income - this is income after tax. It
may be computed by taking box 1 and subtracting all taxes.
Federal Income Tax - Taxes paid to the Federal
government.
State Income Tax - Taxes paid to state
governments.
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