Income. Traditional Lesson Plans. Extension Activities. Overview... 1 Introduction... 3

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1 Income Overview... 1 Introduction... 3 Traditional Lesson Plans Lesson One Plan Your Future... 5 Lesson Two Careers Lesson Three Taxes and My Income Extension Activities Career Exploration Tool Students take an online career assessment to learn about their interests and work values. Career Choice Research Students access career information online and use the Occupational Outlook Handbook to record their findings on a Career Critique Chart. Being an Entrepreneur Students examine entrepreneurial skills and present new business ideas to the class. Starting a Lawn Care Business Students identify a business and figure fixed and variable costs. STEM Careers Students explore STEM occupations and use creativity and problem solving to make a pencil holder from a single sheet of paper. Social Security and Medicare Students read a brief history of Social Security and Medicare and review tax tables for income examples. Sales Receipt Analysis Students examine the cost of sales tax for items in their shopping cart. How to Complete a 1040-EZ Income Tax Form Students complete an IRS Form 1040-EZ and examine the equity of a progressive tax.

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3 Income Overview Students recognize the fundamental role that income plays in their personal finances and the factors that affect income and take-home pay. They discover how their decisions about education and careers impact their potential income and quality of life. Objectives Students will be able to: Rate their interests, abilities, and values. Determine work preferences and match them to career choices. Define taxes and explain their purpose and impact on income. Figure net monthly income. Preparation Decide whether you will use the traditional classroom presentation or the Project-Based Learning option. Also, review and organize the materials for the extension activities you plan to teach. Optional: You may wish to share with students that their participation in JA Finance Park will include a simulation experience. To introduce and build interest in the program, show the introductory video. Go to the CrossKnowledge Learning Suite to access the video. Select the correct video for the simulation your class will use. Your local JA staff also may have a video available. Summary and Assessment Use the lesson summaries at the end of each lesson to review concepts. To assess knowledge learned, administer the Income Assessment on Pages (Answer key is on Pages ) Income Lesson One Required Lessons Lesson One: Plan Your Future Lesson Two: Careers Lesson Three: Taxes and My Income Time The lessons can typically be completed in three 45-minute sessions. Concepts Career Goals Government Income Values Salary Taxes Wages Skills Active listening, critical thinking and reasoning, collaboration, employing valid research strategies, information literacy, invention, self-knowledge and self-reflection, math computation, reading, speaking and listening, using technology to enhance productivity Extension Activities 1. Career Exploration Tool 2. Career Choice Research 3. Being an Entrepreneur 4. Starting a Lawn Care Business 5. STEM Careers 6. Social Security and Medicare 7. Sales Receipt Analysis 8. How to Complete a 1040-EZ Income Tax Form 1

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5 Income Introduction We know that students gain a better understanding of money and financial management when they see how earning money affects their lives. Earning money babysitting or working part time increases confidence, boosts their standard of living, and teaches valuable skills. With income, students begin to ask important questions: When can I buy a car? How much will I need for college? What will I do after college? What s a good salary? What s a great salary? As students consider these questions, they will need to think about what kind of work they want to do in the future and how different careers often require specific education and skills. Students participating in JA Finance Park will examine their abilities, interests, work preferences, and values. They will consider career goals and what steps must be taken to achieve them in a highly technical world. Finally, they will investigate the training needed for their chosen careers. Income Lesson One 3

6 JA Finance Park Teacher Notes 4

7 Income Lesson One: Plan Your Future Teacher Introduction Students are generally aware of the concept of Lesson Time: income, the money received for work or through 45 minutes investments. They might receive a small amount of money from their parents or caregivers or from parttime jobs, government assistance, or profits from a small business. And like adults, teens understand that life is often easier as income increases. They may be less cognizant of the importance of the choices they ll make in the next few years and how those will largely determine their income during adulthood. In this lesson, students will consider their own personal traits and learn about a variety of occupations that may someday earn them an income. They will match a combination of abilities (skills), aptitudes (natural talents), interests, and values with occupational clusters. Students should think about who they are and what occupations best suit them before they commit to a career path. Their abilities and traits will help them define their work preferences and find work that satisfies them. If they have a natural inclination toward one field, they ll adapt to it quickly. Conversely, attempting to work in an occupation where they have little interest or ability can cause unhappiness and stress. Identifying one s interests, abilities, aptitudes, and values is the first step in career planning. Materials oo Student Workbooks oo JA Finance Park Income Slides 1-5 oo Optional: Access to computers and the Internet Vocabulary Abilities The things you do well. Aptitudes Your natural talents. Income Money received on a regular basis for work or through investments. Interests The things you like and enjoy doing. Values The ideals that are important to you and your career choice. Income Lesson One 5

8 JA Finance Park Lesson Preparation Review the Set the Stage talking points. Personalize the lesson by sharing your own experience in career exploration. Review Plan Your Future: Lesson Steps. Review the Student Worksheets on Pages Rate Your Interests Worksheet Rate Your Abilities Worksheet Rate Your Values Worksheet My Worker Profile Worksheet Consider the amount of time you want to use in class to complete the four worksheets, because some students may race through them and invalidate the importance of each step. You may want to assign one or more of the Student Worksheets for homework, although some students may need teacher assistance to complete them. If you choose to use the worksheets as homework, take the time to introduce each of them in class and answer any questions the students may have. Note: The hands-on activity sheet on Page 7 of the Student Workbook, called My Worker Profile, may take a large portion of one class. Once clearly explained, it could be better suited for homework. Plan Your Future: Lesson Begins Set the Stage 5 Minutes Spend a few minutes discussing the following questions with the students. Let s talk about you. Where do you see yourself after high school? What kind of job do you think you ll eventually have? What skills will the job require? What will you need to know going into the job? 6

9 Do you think someday you will have a family to support? Will you have student loans to pay off? Do you see yourself doing one job for many years, or do you think you will try different kinds of jobs? Plan Your Future: Lesson Steps 35 Minutes 1. Share with students that it was an exciting day when you began earning income from your first job. Present Slide 1. Ask students if they plan to work a summer job and why. According to the slide, 63 percent of students surveyed said they do plan on working. Present Slide 2 and briefly describe how adults typically receive income. Employees who work for an employer earn wages or a salary. Income also can be received through the sale of goods or property, or through the profit from financial investments, such as stocks or bonds. Those who possess a strong work ethic and an entrepreneurial spirit may wish to start their own business and be self-employed. Income Lesson One 2. Explain that one of the most important decisions students will make will be about their future career. Because their chosen field will consume a lot of their time, they will want to select a career that makes them happy with an income that meets or exceeds their lifestyle. It is important to select an occupation that suits their interests, abilities, and values. 3. Present Slides 3 and 4 with the lesson s vocabulary. Have students highlight the words in their Student Workbooks on Page 3 as you introduce them. 7

10 JA Finance Park 4. Ask student volunteers to read the Interests, Abilities, and Values discussion points in their Student Workbooks on Page 3. Solicit student feedback. Activity 5. Have students complete the Rate Your Interests, Rate Your Abilities, and Rate Your Values Worksheets in their Workbooks on Pages Present Slide 5, My Worker Profile Worksheet. Using their completed Student Workbook sheets, students identify their top three interests, abilities, and values and fill in Page 7, My Worker Profile Worksheet, in their Workbooks. Students fill in the triangle with their top choices, one per triangle. Career Exploration Tool In place of worksheets, have students use the career exploration tool. The online assessment will take from 15 to 30 minutes. The Extension Activity instructions start on Page 16 of the Student Workbook (Page 47 of this guide). 7. Have students find a partner or assign partners and ask them to discuss their career preferences based on their interests, abilities, and values. Summary and Review 5 Minutes During this lesson, students used self-directed surveys to determine their interests, abilities, and values. These instruments helped them identify their skills and will help them in the future to explore occupations that most closely relate to those attributes. Ask students if they spotted a trend in their responses that would narrow a choice for a future career. Emphasize that their personal preferences are only part of the puzzle when it comes to being career-ready. They will need to apply what they learn in school today and in their education after high school to have the knowledge and technical skills needed for a 21st century career. Digging Deeper: Reflective Writing Activity Have students find connections between their passions and future careers by writing a first-draft essay that explores a particular passion. Topics could include using cooking skills to feed the homeless, creating a comic book to teach reading, or using music for a social cause like protecting the environment. Students will then write a persuasive essay that turns their passion into a future career. 8

11 Rate Your Interests Income Lesson One Student Worksheet, Page 4 Income Lesson One 9

12 JA Finance Park Rate Your Abilities Income Lesson One Student Worksheet, Page 5 10

13 Rate Your Values Income Lesson One Student Worksheet, Page 6 Income Lesson One 11

14 JA Finance Park My Worker Profile Income Lesson One Student Worksheet, Page 7 12

15 Income Lesson Two: Careers Teacher Introduction Equipped with knowledge about their interests and work preferences, students are ready to think about careers that someday will provide them with an income. They will gain insight into occupations from various career clusters. Being career-ready means doing a number of things well. Creativity is essential for many 21st century jobs. Students also will need strong academic and problem-solving skills and the ability to apply those skills to the workplace. Once employed, they will need job-specific and technical skills to advance in their careers and increase their pay. Selecting an occupation does not mean choosing one job for a lifetime. It s possible to select a job within a general occupational area, then branch out and try a related job. The Department of Education s career cluster model has 16 broad categories that link to more specific career pathways, each with its own knowledge and skill requirements. The categories encompass virtually all current occupations from entry through professional level. The various jobs within an occupational cluster are connected by skill sets. Although workers in related jobs may share some of the same interests, skills, or abilities, each job is different. In this lesson, students will consider their own personal traits and match them to a variety of occupational clusters. Materials Lesson Time: 45 minutes oo Student Workbooks oo Career Cluster Cards reductions (Pages 22-27) are available on the CrossKnowledge Learning Suite. oo JA Finance Park Income Slides 6-11 oo Optional: Copy paper in various colors, scissors, markers, and tape oo Optional: Access to computers and the Internet oo Optional: Timer Vocabulary Career cluster A grouping of jobs and industries related by skills or products. Income Lesson Two 13

16 JA Finance Park Lesson Preparation Download the Career Cluster Cards and tape them around the room. Review the Set the Stage talking points. Review Careers: Lesson Steps. Review the lesson materials on Pages Career Clusters Career Cluster Card Memory Sheet Careers: Lesson Begins Career Cluster Cards Set the Stage 10 Minutes Present Slide 6 as you discuss the following: How you manage your life today will help shape your future success. What skills or talents do you see in yourself that lead you to believe you will have a successful future? Present Slide 7 with the Bureau of Labor Statistics job growth chart. Have students point out the occupations expected to have the fastest job growth (healthcare support, personal care and service, healthcare practitioners and technicians, and community and social services). Discuss projected job trends. Ask students to suggest reasons why the eight broad professions shown on the slide are expected to increase by more than 15 percent. 14

17 Present Slides 8 and 9. Point out the pie chart in Slide 8. Ask students why it is important that they stay in school and earn a high school diploma. Show the chart on Slide 9. Pose the question: What are the employment and salary prospects for those without at least a high school diploma? Based on education levels, who makes the most money and has the greatest job security? Discuss how higher education, which requires money for tuition, books and living expenses, is needed for many careers and how more education usually means more take-home pay. Paths to more income often include a traditional college degree but also may include a certificate program for occupations such as construction, drafting, car maintenance, cosmetology, woodworking, or welding. Optional: Demonstrate the paths careers can take by gathering the job histories of two or three people you know, beginning with their first job, (paid or as a volunteer, such as mother s helper, lawn mowing, babysitting, dog walking) to their current position. Most adults will have had many smaller jobs that led to a career or significant occupation, which would best illustrate this activity. Wanted: Skills A job seeker must have certain knowledge and skills an employer is looking for. Academic knowledge and technical skills: This includes college or technical training, math, written and verbal skills, and technology skills to increase workplace productivity. Income Lesson One Two Look for work histories that show how one job may lead to another from elementary, middle, high school, and college depending on a person s interests and work preferences. For example, a person may start work as a babysitter, followed by work as a youth camp counselor, then finally becoming a nursery school teacher. Optional: Have two or three student volunteers ask their parents about their work history and then report to the class. As the histories are being presented, record the various jobs on the white board. Show the links of learning gained from one job to the next by asking the students to direct you in making the connections. A job history may contain a gap in which a link Success skills: These include critical thinking the ability to make sense of problems and help to solve them as well as creativity and honesty. 15

18 JA Finance Park seems to be absent. Ask the students to speculate about the reason for the gap. What skills were needed in the previous job(s)? What skills were learned in middle school, high school, or college that were used on the job? This discovery step is important for students to begin to think about what they are doing now or could be doing to become employable. Careers: Lesson Steps 30 Minutes 1. Present Slide 10. Let students know that they will take a look at how each of them can begin to make career choices. 2. Explain to students that selecting an occupation does not necessarily mean choosing one job for life. It is possible to select a job within a general occupational area, then branch out and try a related job. 3. Present Slide 11. Have students highlight the vocabulary word in their Student Workbooks on Page 8 as you introduce it. 4. Inform students that the Department of Education s career cluster model has 16 broad categories that link to more specific career pathways, each with its own knowledge and skill requirements and which encompass all occupations from entry through professional level. Have students turn to Page 9 in their workbooks to see the 16 career cluster categories. Have them read aloud one or two and then circle the top cluster that interests them. The various jobs within an occupational cluster are connected by skill sets. Although workers in related jobs may share some of the same interests, skills, or abilities, each job is different. 16

19 5. Activity: Explain to students that they will now play a memory game to learn more about career clusters. Point to the Career Cluster Cards you taped around the room. Tell students that each card describes one of the career clusters they read about in their workbooks. Separate the class into groups of two or three students. Assign each group a Career Cluster Card. If your class is small, play with half the cards. Explain that each card has three careers with job descriptions and salaries that can be found within that cluster. 6. The activity starts with one representative from each group going to the group s assigned card. He or she will have 30 seconds to memorize as much information as possible from the card, including the career cluster title, one or more job names, job descriptions, and yearly and hourly salaries. The representative will then return to the group to relay the information. Group members will record everything they hear on their Career Cluster Card Memory Sheets on Page 10 of their Workbooks. On your cue, another group member will then be sent to memorize even more information from the card. If the groups have three members, the final member will do the same. Groups will record the information on their sheets solely on the verbal communications of their teammates. Income Lesson One Two 7. Start the activity by calling begin and setting the timer. 8. After all groups have taken a turn, have students remove their Career Cluster Card from the wall and bring it back to the group. Using the rubric found on the student s Career Cluster Card Memory Sheet, students judge how well the group did capturing the information for one or more jobs from the card. Ask groups to share the points they learned. Congratulate the winning group. Ask why some information was missed. How was the winning group s work different from the others? 9. Finally, explain that when students choose to go to college or earn a technical certificate or industry certification after high school, they invest in their future earning potential. Education and training produces skilled labor. Training and experience usually increase earnings over a lifetime. Career Research Online Option Have students research the education requirements for the career(s) of their choice. The Career Choice Research Extension Activity instructions start on Page

20 JA Finance Park To learn more about the 16 career clusters, allow extra class time to have a representative from each group read aloud the name of their assigned cluster and the one- or two-sentence description of the cluster found under the cluster title. Ask the class to guess what careers might fit in that cluster. If there is a cluster that students struggle to list a career for, you can share one or all of the jobs listed on the Career Cluster Card. Optional: Tape each of the 16 Department of Education career cluster categories around the room. Organize the students into small groups of three or four. Give each group a few sheets of paper. Have each group generate a list of job titles and then cut them into individual pieces to determine which cluster the titles fit under. Groups should make every effort to generate jobs for each of the 16 clusters. Each group will need scissors, markers, and tape to tape each of their job titles under the correct job cluster category. The group with the most interesting and accurate job titles is to be congratulated. Optional: Once the students become familiar with the 16 career cluster categories, have them use the job histories presented earlier during class and place those jobs under the 16 career clusters. Optional: For further study on careers, have students visit to see featured videos on popular careers. Summary and Review 5 Minutes Review with students that a general exploration of career goals coupled with their interests, abilities, and values helps teens narrow the focus of possibilities when planning their future. Education and specialized training will help students be successful workers no matter what occupation they choose to earn an income. Ask the students why it was important for team members to work together. Discuss why giving clear and precise verbal instructions lead to a successful outcome. Ask the class to give you examples of careers where working as a team and giving specific instructions could be important. 18

21 Digging Deeper: Career Goal-Skill Components Activity Have students identify a career. (It doesn t have to be their final choice.) Ask them to research it to get more information and prepare a report to share. Suggest they visit colleges or technical schools with programs in their career field and prepare a visual presentation to share. Finally, encourage students to volunteer, intern, or shadow someone in the occupation to get firsthand experience. For more information about careers, have the students visit: Digging Deeper: Extension Activities Three extension activities are available to help students further explore career options. 1. Being an Entrepreneur on Page Starting a Lawn Care Business on Page STEM Careers on Page Ask the students to interview an appropriate adult (one who is employed and is known by the student and the student s family) about his or her job history. Have the students do an evaluation piece of writing about the skills and knowledge this person gained from middle school through high school that led to having various jobs. Income Lesson One Two 19

22 JA Finance Park Career Cluster Categories Income Lesson Two Student Worksheet, Page 9 20

23 Career Cluster Card Memory Sheet Income Lesson Two Student Worksheet, Page 10 Income Lesson One Two 21

24 JA Finance Park Career Cluster Cards Income Lesson Two 22

25 Career Cluster Cards Income Lesson Two Income Lesson One Two 23

26 JA Finance Park Career Cluster Cards Income Lesson Two 24

27 Career Cluster Cards Income Lesson Two Income Lesson One Two 25

28 JA Finance Park Career Cluster Cards Income Lesson Two 26

29 Career Cluster Cards Income Lesson Two Income Lesson One Two 27

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31 Income Lesson Three: Taxes and My Income Teacher Introduction The idea of a future career with a steady paycheck Lesson Time: is inspiring to teens. What they may not know is 45 minutes that their take-home pay will be reduced by taxes that are automatically withheld by their employer from wages, salaries, and tips. Those taxes are paid to the Internal Revenue Service (IRS) and most state governments. The IRS enforces tax laws enacted by the U.S. Congress, which is responsible for the nation s tax system. Most everyone who holds a job pays income tax. Students need to develop an understanding of taxes and be prepared to deal with their impact on income. Tax knowledge is an integral part of personal financial management. In this lesson, students will learn the three main sources of tax revenue: income, sales, and property tax. They also will learn that certain taxes are automatically withheld from the paychecks of U.S. citizens and residents. Then, between January and April of each year, citizens and residents are required to file annual income tax forms. If the amount that has been withheld from each paycheck is greater than the tax they owe, they receive a refund. If the amount withheld is less than the tax they owe, they must pay the additional amount. Finally, students will determine their net monthly income (NMI) using income tax and Social Security and Medicare deductions (also known as FICA, the Federal Insurance Contributions Act). JA Finance Park Simulation Connection During the JA Finance Park simulation, students will subtract federal and state/local income taxes from the money they receive in wages. They will calculate their net monthly income (NMI) using federal and local income taxes and Social Security and Medicare deductions. Vocabulary Income tax A portion of one s personal income paid to a government. Medicare A social insurance program that extends health coverage to almost all Americans age 65 and over. Social Security A social insurance system that provides benefits to most Americans who are retired, sick, or too disabled to work, and to families of workers who have died. Taxes Required payments to a government. Income Lesson Three 29

32 Jason has landed a summer job working as a paid intern for a medical research company. His paycheck shows the deductions from his pay. More than likely, his paycheck will be automatically deposited into his checking account through direct deposit. See Jason s sample earnings statement below. ABC Medical Corporation Period Ending: 06/14/13 1 Corporate Rd. Pay Date: 06/28/13 Anytown, USA Jason Winters Exemption/Allowances: 555 Pine Court Social Security Number Federal: 0 Anytown, USA Taxable Marital Status: Single State: 0 Local: 0 Earnings Rate Hours This Period Year to Date Regular $ $ $ Overtime If Jason lived in your state, what Vacation would the state income tax Holiday deduction be? Gross Pay $ $ Deductions: Is there a county tax deduction Federal Income Tax $ $ where you live? State Income Tax $42.24 $42.24 If yes, what amount would be Medicare Tax $13.92 $13.92 deducted from Jason s paycheck? Social Security Tax $59.52 $59.52 Other: Calculate Jason s net pay, given Health Insurance the deductions for your state. 401K* What is the new amount? Transfer to Savings Net Pay (Checking ACH) $ *Excluded from federal taxable wages Pay Period Earnings Taxes Other Deposit Number Check Amount 06/01/13-06/14/13 $ $ $ $ Tear Here DATE 06/28/13 SEVEN HUNDRED THIRTY DOLLARS AND 18/100 $ PAY TO THE ORDER OF Jason Winters 555 Pine Court CHECK NUMBER Anytown, USA Using the information below, calculate each worker s net monthly income (NMI). GAI is gross annual income, and GMI is gross monthly income. (Note: Actual state and local tax rates will vary.) Jamal works at the recreation center 15 hours a week during the school year. He earns $8.75 an hour. In a typical month, he works 63 hours. Calculate his monthly taxes below. Gross Monthly Income $ Monthly Federal Income Tax (10%) $ Monthly Social Security (FICA) (6.2%) $ Monthly Medicare (1.45%) $ Monthly State Tax (4%) $ Monthly Local Tax (0.1%) $ Total Monthly Deductions $ Jamal s NMI = $ A college student, Trey works part time for an annual salary of $13,500 a year. Gross Monthly Income $ Monthly Federal Income Tax (11.6%) $ Monthly Social Security (FICA) (6.2%) $ Monthly Medicare (1.45%) $ Monthly State Tax (4%) $ Monthly Local Tax (0.1%) $ 1.12 Total Monthly Deductions $ Trey s NMI = $ Marie is a college professor. Her annual salary is $66,000. Gross Monthly Income $ Monthly Federal Income Tax (18.7%) $ Monthly Social Security (FICA) (6.2%) $ Monthly Medicare (1.45%) $ Monthly State Tax (4%) $ Monthly Local Tax (0.1%) $ Total Monthly Deductions $ Marie s NMI = $ JA Finance Park Materials oo Student Workbooks oo JA Finance Park Income Slides oo Receipts from stores showing sales tax or make enough copies for students to share oo Copies of property tax bills and pay stubs showing various deductions oo Calculators oo Index cards, one per student, used in the Summary and Review portion of the lesson Lesson Preparation Optional: Make copies of the Income Assessment, Pages 40-41, one for each student. Students will take the assessment at the conclusion of this lesson. The assessment takes minutes to complete. Review the Set the Stage talking points. Review Tax and My Income: Lesson Steps. Review the Student Worksheets on Pages Jason s Paycheck Paycheck Calculations ABC Medical Corporation SAMPLE CHECK What Are Taxes? Overview Worksheets Jason s Paycheck Worksheet Paycheck Calculations Worksheet 30

33 Taxes and My Income: Lesson Begins Set the Stage 5 Minutes Spend a few minutes discussing the following questions with the students. Who pays taxes? Any ideas? (Answer: People who hold jobs, buy things, or own property.) True or false: Students like you are too young to pay taxes. (False. Shoppers of all ages pay sales tax in the 45 states that have such taxes. Sales tax adds an extra cost to nearly everything we buy, though groceries and medicine are often exempted.)»» Distribute the receipts you brought to class and have students find and circle the sales tax on each. Point out that whenever consumers buy something, sales tax is automatically included in the total bill if the item is purchased in a state with a sales tax. The money collected is sent to local and/or state tax collectors.»» If students receive pay from a summer job, income taxes are automatically withheld by their employer and set aside in a tax account to be paid to the IRS. Income Lesson Three Taxes and My Income: Lesson Steps 30 Minutes 1. Present Slides 12 and 13, with some of the lesson s vocabulary. Have students highlight the words in their Student Workbooks on Page 11 as you introduce them. 2. Income, sales, and property taxes are the three main sources of tax revenue for governments. Direct students to Pages in the Student Workbook to read and discuss the What Are Taxes? Overview Worksheets. Sales Receipt Analysis Option Students in most states pay sales tax. Have them compute the sales tax and final cost for items in their shopping cart. Extension Activity instructions start on Page

34 JA Finance Park 3. Present Slides 14-16, Income Tax Uses, Property Tax Uses, and Sales Tax Uses. Discuss how taxes are withheld from take-home pay to cover the costs of local, state, and federal government services. Making It Real Ask students to share activities they ve done over the past two or three days. List them on the board. Ask them to tell you what goods or services they or their family used for those activities. For example, when students go to soccer practice, they use public roadways, and the playing field may be on public property (a park or school). Tax money is pooled and used to pay for government services. Roads, the military, public schools, police and fire protection, parks and playgrounds, certain summer job programs for youth, student loans for college, and Social Security benefits are examples of services funded with tax revenue. 4. Explain that taxes tied to the ability to pay are considered progressive. Taxes that remain the same regardless of ability to pay are regressive. The United States Taxpayers Explain to students that employees can adjust the amount that is withheld from their paychecks if they think they ll be paying too much or too little each month. The goal for taxpayers is to pay just the right amount each month so they neither owe additional taxes nor receive refunds at tax time. has a progressive income tax. Sales taxes are usually considered regressive. If you spend $10.00, the sales tax is the same, whether you are a millionaire or an unemployed teenager. 5. Present Slide 17, Jason s Paycheck. 32

35 Direct students to Jason s Paycheck Worksheet on Page 14 in the Student Workbook. Ask the following questions: What is the name of the employee on the Earnings Statement? (Jason Winters) Who is his employer? (ABC Medical Corporation) What is Jason s hourly pay? ($12.00) What is Jason s take-home pay? ($730.18) How much Social Security (or FICA) was taken out of Jason s pay? ($59.52) True or false: Jason did not make a 401K contribution. (True) Have students research the state and local income tax rate(s) that apply in your area, or provide them with the percentages, so they can answer the four questions in the inset box on Jason s Paycheck worksheet. If class time permits, present Slides on the effect of taxes on income. Vocabulary also can be found in the Student Workbook on Page 11. Social Security Online Option Have students learn more about Social Security and Medicare. Extension Activity instructions start on Page 69. Income Lesson Three Define the net monthly income (NMI) terms shown. Walk through the NMI calculation example. Inform students that deductions for state and local income taxes vary by community. Share current local tax rates including state payroll, state disability, county, and city taxes with students so they become aware of additional deductions they may be assessed. 33

36 JA Finance Park Making It Real State and local tax rates vary. Share with students that in the calculation on Slide 17, state income tax is not included as a deduction. But in 2013, a person living in Ohio and earning $56,000 a year would pay $ per month in state income tax. If that person lived in California, the state income tax would be $ per month. Ask students to calculate the tax payment in their state. Activity: Using the Paycheck Calculations Worksheet on Page 15 of the Student Workbook, students practice deducting taxes and calculating net monthly income to see how much is left for them to spend. Consider doing Jamal s calculation as a class and then divide the class into two groups to complete the activity. Have groups share their results. The answer key to Paycheck Calculations is on Page 39. Making It Real Either have students research state and local income tax rates that apply in your community or provide the percentages that they can use to calculate the net monthly income examples in the Paycheck Calculations Worksheet on Page 15 of the Student Workbook. ( is an example of a free Web-based paycheck calculator) Remind students that federal income tax is a progressive tax. That means citizens pay a higher rate as their income increases. 34

37 Summary and Review 10 Minutes Remind students that some of the most important decisions they will make will be about their future. It is important to choose an occupation that suits their interests, skills, and values. Students also learned about taxes. It s been said that taxes are what we pay to live in a civilized society. Taxes deducted from paychecks are needed to pay for the services people have come to expect from government. Many of these services are for things people could not afford individually, such as maintaining an army and a national highway system. Check for lesson understanding. Pass out the index cards. Ask students to write the word taxes on the front of an index card. On the back side, have them identify something they do not fully understand and write it as a statement or question. Collect the cards and read the statements or questions aloud to see if the class can help clarify any issues raised. Digging Deeper: Extension Activities If additional class time is available, consider adding the Being an Entrepreneur (Page 55), Starting a Lawn Care Business (Page 59), or STEM Careers (Page 63) extension activity to your lesson planning. Income Income Lesson Lesson Three One Also consider adding the extension activity How to Complete a 1040-EZ Income Tax Form (Page 79). Ask the students to name some deductions that can be taken from a paycheck. (Disability insurance, money designated for savings, 401K plans, union dues, health insurance premiums, etc.) Pass out sample pay stubs that show details of deductions and taxes. Have the students figure out the percent of individual taxes and/or deductions taken from the gross, and also determine which deductions are required by law. What is the total percent deducted? Finally, have the students list in order of importance (to the student) any other deductions. Digging Deeper: Writing Prompt Activity Ask the students: In your opinion, what is the single most important thing teens need to know about working their first summer job? Have students write a paragraph to convince a classmate to follow their advice so that he or she may succeed in earning that first paycheck. Optional: Distribute copies of the Income Assessment sheets on Pages and have students complete them. The Answer Key is found on Pages

38 JA Finance Park What Are Taxes? Overview Income Lesson Three Student Worksheet, Page 12 36

39 What Are Taxes? Overview Income Lesson Three Student Worksheet, Page 13 Income Income Lesson Lesson Three One 37

40 JA Finance Park Jason s Paycheck Income Lesson Three Student Worksheet, Page 14 Jason s Paycheck Jason has landed a summer job working as a paid intern for a medical research company. His paycheck shows the deductions from his pay. More than likely, his paycheck will be automatically deposited into his checking account through direct deposit. See Jason s sample earnings statement below. ABC Medical Corporation 1 Corporate Rd. Anytown, USA Jason Winters 555 Pine Court Anytown, USA Regular Overtime Vacation Holiday Gross Pay Deductions: Federal Income Tax State Income Tax Medicare Tax Social Security Tax Other: Health Insurance 401K* Transfer to Savings Net Pay (Checking ACH) *Excluded from federal taxable wages Social Security Number Taxable Marital Status: Single Earnings Rate Hours This Period Year to Date $ $ $ $ $ Gross Pay $ $ $ $42.24 $13.92 $ $ $ $42.24 $13.92 $ Period Ending: 06/14/13 Pay Date: 06/28/13 Exemption/Allowances: Federal: 0 State: 0 Local: 0 If Jason lived in your state, what would the state income tax deduction be? Is there a county tax deduction where you live? If yes, what amount would be deducted from Jason s paycheck? Calculate Jason s net pay, given the deductions for your state. What is the new amount? Pay Period Earnings Taxes Other Deposit Number Check Amount 06/01/13-06/14/13 $ $ $ $ Tear Here ABC Medical Corporation SEVEN HUNDRED THIRTY DOLLARS AND 18/100 $ PAY TO THE ORDER OF Jason Winters 555 Pine Court Anytown, USA DATE 06/28/13 SAMPLE CHECK CHECK NUMBER

41 Paycheck Calculations Income Lesson Three Student Worksheet, Page 15 Answer Key Paycheck Calculations Using the information below, calculate each worker s net monthly income (NMI). GAI is gross annual income, and GMI is gross monthly income. (Note: Actual state and local tax rates will vary.) Jamal works at the recreation center 15 hours a week during the school year. He earns $8.75 an hour. In a typical month, he works 63 hours. Calculate his monthly taxes below. Gross Monthly Income $ Monthly Federal Income Tax (10%) $ Monthly Social Security (FICA) (6.2%) $ Monthly Medicare (1.45%) $ Monthly State Tax (4%) $ Monthly Local Tax (0.1%) $ Total Monthly Deductions $ Jamal s NMI = $ Income Income Lesson Lesson Three One A college student, Trey works part time for an annual salary of $13,500 a year. Gross Monthly Income $ 1, Monthly Federal Income Tax (11.6%) $ Monthly Social Security (FICA) (6.2%) $ Monthly Medicare (1.45%) $ Monthly State Tax (4%) $ Monthly Local Tax (0.1%) $ Total Monthly Deductions $ Trey s NMI = $ Marie is a college professor. Her annual salary is $66,000. Gross Monthly Income $ 5, Monthly Federal Income Tax (18.7%) $ Monthly Social Security (FICA) (6.2%) $ Monthly Medicare (1.45%) $ Monthly State Tax (4%) $ Monthly Local Tax (0.1%) $ Total Monthly Deductions $ Marie s NMI = $ 1, , ,

42 Income Assessment Choose the best answer for each question. Write the letter that corresponds with your answer on the line provided. 1. Your abilities include a) The things you do well b) Your mental competence c) The skill you need to do something d) All of the above 2. Career planning is done a) After high school b) In college c) Throughout a lifetime d) Once in a lifetime 3. Who pays taxes? a) Most people who have a job b) Most people who purchase items c) Most people who own property d) All of the above 4. What are the three main types of taxes? a) Income, sales, and property b) Unemployment, sales, and property c) Federal income, unemployment, and state d) Sales, property, and unemployment 5. What is Social Security? a) A private insurance system just for the elderly b) A free insurance system c) The amount of money someone has d) None of the above 6. The purpose of taxes is to a) Improve roads b) Support government c) Pay retirement benefits d) All of the above

43 Income Assessment 7. Who pays into Social Security? a) Employees b) Self-employed c) Employers d) All of the above 8. Federal, Social Security, and Medicare are all types of taxes. a) True b) False 9. The total amount of earnings made over a one-year period after all deductions have been taken is known as a) Gross annual income b) Gross monthly income c) Net annual income d) Net monthly income 10. The total amount of earnings made over a month, before any deductions, is known as a) Gross annual income b) Gross monthly income c) Net annual income d) Net monthly income 11. Tina will be working at the municipal swimming pool as a lifeguard this summer. She will earn $1,000 per month (a total of $3,000 for the whole summer). Tina does not plan to work any other jobs this year. Answer the questions: a) What is Tina s gross annual income (GAI)? $ b) Tina s total paycheck deductions are listed below. Add these amounts together to determine her total paycheck deductions for the three months. $»» $ federal income tax (summer total)»» $ state income tax (summer total)»» $ Social Security, or FICA (summer total)»» $43.50 Medicare tax (summer total) c) What is Tina s gross monthly income for each of the summer months (GMI)? $ d) What is Tina s net monthly income for each of the summer months (NMI)? $

44 JA Finance Park Income Assessment Answer Key Choose the best answer for each question. Write the letter that corresponds with your answer on the line provided. 1. a Your abilities include a) The things you do well b) Your mental competence c) The skill you need to do something d) All of the above 2. c Career planning is done a) After high school b) In college c) Throughout a lifetime d) Once in a lifetime d 3. Who pays taxes? a) Most people who have a job b) Most people who purchase items c) Most people who own property d) All of the above 4. a What are the three main types of taxes? a) Income, sales, and property b) Unemployment, sales, and property c) Federal income, unemployment, and state d) Sales, property, and unemployment 5. d What is Social Security? a) A private insurance system just for the elderly b) A free insurance system c) The amount of money someone has d) None of the above 6. d The purpose of taxes is to a) Improve roads b) Support government c) Pay retirement benefits d) All of the above 42

45 Income Assessment Answer Key 7. d Who pays into Social Security? a) Employees b) Self-employed c) Employers d) All of the above 8. a Federal, Social Security, and Medicare are all types of taxes. a) True b) False 9. c The total amount of earnings made over a one-year period after all deductions have been taken is known as a) Gross annual income b) Gross monthly income c) Net annual income d) Net monthly income 10. b The total amount of earnings made over a month, before any deductions, is known as a) Gross annual income b) Gross monthly income c) Net annual income d) Net monthly income Income Income Lesson Lesson Three One 11. Tina will be working at the municipal swimming pool as a lifeguard this summer. She will earn $1,000 per month (a total of $3,000 for the whole summer). Tina does not plan to work any other jobs this year. Answer the questions: a) What is Tina s gross annual income (GAI)? $ $3,000 b) Tina s total paycheck deductions are listed below. Add these amounts together to determine her total paycheck deductions for the three months. $ $599.40»» $ federal income tax (summer total)»» $ state income tax (summer total)»» $ Social Security, or FICA (summer total)»» $43.50 Medicare tax (summer total) c) What is Tina s gross monthly income for each of the summer months (GMI)? $ $1,000 d) What is Tina s net monthly income for each of the summer months (NMI)? $ $

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47 Income Extension Activities Career Exploration 1Tool Students take an online career assessment to learn about their interests and work values. Career Choice 2Research Students access career information online and use the Occupational Outlook Handbook to record their findings on a Career Critique Chart. 3Being an Entrepreneur Students examine entrepreneurial skills and present new business ideas to the class. STEM Careers Students explore STEM occupations and use creativity and problem solving to make a pencil holder from a single sheet of paper. 6Social Security and Medicare Students read a brief history of Social Security and Medicare and review tax tables for income examples. Sales Receipt 7Analysis Students examine the cost of sales tax for items in their shopping cart. Income Extension Activities 4Starting a Lawn Care Business Students identify a business and figure fixed and variable costs. 8How to Complete a 1040-EZ Income Tax Form Students complete an IRS Form 1040-EZ and examine the equity of a progressive tax. 45

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49 o Assignment: Research jobs that interest you using the online career exploration tool. 1. Follow your teacher s instructions to access the online tool. Career Exploration Tool 1Extension Activity Overview Junior Achievement offers an online career exploration tool to help students in middle school and high school learn about their interests and work values. At the time of this printing, detailed instructions to access this tool were unavailable. Please go to jamyway.org for current information. Teacher Introduction As participants in JA Finance Park, your students can complete a free online career exploration using a tool that will reveal what career fields they might enjoy. Go to jamyway.org, click on the menu icon and select Resources. There you will find instructions on how to access the online tool and register your students. Materials and Preparation oo Computers and Internet access oo Student Workbooks, Page 16 Activity Time: 30 minutes Income Extension Activity 1 How to Register 1 Extension Career Exploration Activity 16 47

50 JA Finance Park Career Exploration Tool Activity Steps 1. Go to jamyway.org and follow instructions on accessing the career site. 2. Assignment: Students take the online assessment, following the instructions on jamyway.org. Summary and Review After students have taken the assessment, suggest that they share what they have learned about their interests and career planning with their parents. 48

51 Career Exploration Tool Income Extension Activity Student Worksheet, Page 16 o Assignment: Research jobs that interest you using the online career exploration tool. How to Register 1 Extension Career Exploration Activity 1. Follow your teacher s instructions to access the online tool. Income Extension Activity 1 49

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53 2 Extension Overview Students access career information online using the Bureau of Labor Statistics Occupational Outlook Handbook and summarize their findings in a Career Critique Chart. Teacher Introduction Career Choice Research Activity Activity Time: 45 minutes Choosing a career is an important decision. Students have many resources available for research. Learning to use these resources will allow them to repeat the career-planning process today and throughout their lifetime. Interests typically dictate what work people enjoy. As interests change, people often are attracted to new occupations. Today s workers are expected to work as many as seven different occupations during their lifetimes. Based on students personal interests, abilities, and values, they will identify three careers that appeal to them and perform the online research to learn more about them. Income Extension Activity 2 Materials and Preparation oo Computers and Internet access oo Student Workbooks, Career Choice Research Worksheet, Page 17, and Career Critique Chart Criteria Worksheet, Page 18 Career Choice Research Worksheet Career Critique Chart Criteria Worksheet 51

54 JA Finance Park Career Choice: Research Activity Steps 1. Review the Student Worksheets for this activity. 2. Students research three careers that seem compatible with their interests, abilities, and values. They access career information using the Bureau of Labor Statistics Occupational Outlook Handbook at 3. Students fill in the Career Critique Chart with their research and then summarize and score criteria, with a 5 for excellent, 3 for good, and 1 for not a good fit. 4. Optional: Have students visit and ed.gov/collegenavigator to find colleges offering programs in their field. 5. Have students share and discuss their career findings with a partner. Summary and Review Students discover that knowing their interests and abilities before researching a career is important. A self-assessment plus knowledge and aptitude helps in making career decisions; this can result in a successful work experience. Have students review the results of their career research. Present them with the possibility that they will be offered all three of their career choices in the form of summer jobs. They will need to make a decision on which one to choose. Have them decide the long- and short-term benefits of their top choice and make the best decision based on the information they ve gathered. 52

55 Career Choice Research Income Extension Activity Student Worksheet, Page 17 Income Extension Activity 2 53

56 JA Finance Park Career Choice Research Income Extension Activity Student Worksheet, Page 18 54

57 3 Extension Overview Students learn the characteristics of entrepreneurs and prepare a PowerPoint or paper-based presentation to introduce new entrepreneurial companies. Teacher Introduction Being an Entrepreneur Activity The workplace is changing. Entrepreneurship, start-ups, and selfemployment will be a choice for many workers in the future. Business and social entrepreneurs are people who start businesses in hopes of making a profit or spurring social change. Entrepreneurs often possess a specific expertise in an industry. They also may have financial planning experience and possess the insight, creativity, and skills to face the challenges of a new and growing company. Entrepreneurs may entice team players with diverse talents and backgrounds to join the company as it moves from a start-up to a more seasoned venture. Entrepreneurial skill components are: ;; Knows all about his or her business. ;; Listens to others. ;; Relies on others who have different expertise. ;; Thinks, reasons, then acts. ;; Is good with people and an eager self-starter. ;; Keeps others informed of progress and possibilities. ;; Is a good planner and organizer. ;; Desires to find a faster, easier way to do things. Activity Time: 1 hour Income Extension Activity 3 55

58 JA Finance Park Materials and Preparation oo Computers with PowerPoint, or poster board and markers oo Student Workbooks, Being an Entrepreneur, Page 19, and New Business Peer Review Sheet, Page 20 oo Make 21 copies of the New Business Peer Review Sheet, Page 58 oo Invite three student judges to class Being an Entrepreneur Worksheet Being an Entrepreneur: Activity Steps New Business Peer Review Sheet 1. Review the Student Worksheets for this activity. 2. Separate students into seven groups. Give each group a number (1, 2, 3, etc.). 3. Groups start new companies that aim to fill a particular need or want for teens. For example, the business can offer a new product, such as an app, a backpack, or a high-protein energy bar. Groups create a five-slide PowerPoint or paper-based presentation highlighting the features of the new company to share with the class. 4. Distribute the New Business Peer Review Sheets to the three guest student judges. The judges will use the sheets to rate the group presentations. 5. Have students share their presentations. Ask judges to offer positive and helpful feedback and pointers to each group. Declare the winning entrepreneurial presentation. Summary and Review Entrepreneurs are passionate about filling a need or want. They are adept at assessing their desires and interests and deciding on a plan of action. Their ideas are their resume. One or more ideas may eventually become a product or service that will excite and hold consumers interest and showcase the entrepreneur s qualifications and expertise. Based on today s discussion and presentations, have students list the skills that would make a great entrepreneur. 56

59 Being an Entrepreneur Income Extension Activity Student Worksheet, Page 19 Income Extension Activity 3 57

60 JA Finance Park Being an Entrepreneur Income Extension Activity Student Worksheet, Page 20(continued) 58

61 Starting a Lawn Care Business 4Extension Activity Overview Students plan a neighborhood lawn care business. They learn about the importance of identifying a market and how to project their fixed and variable costs. Teacher Introduction Energetic teens like to start businesses. Charging others for the jobs they often perform at home for free is appealing. A lawn care service is a good example of such a business. New businesses must consider both fixed and variable costs when setting prices for their products and services. Students will need to consider equipment rental costs, maintenance, and wages to see if, in the end, their venture will be profitable and worth their time and effort. Materials and Preparation Activity Time: 45 minutes oo Student Workbooks, Pages 21-22, Starting a Lawn Care Business Income Extension Activity 4 Starting a Lawn Care Business Worksheets Starting a Lawn Care Business: Activity Steps 1. Review the Student Worksheet and answer key for this activity. 2. Separate the class into groups of three to four students. Tell the groups they will start a lawn care business to meet a need in their community. Perhaps they have seen senior citizens and two-worker families who either are unable to care for their lawns or who don t have the time to do so. (You may prefer to substitute car-washing or babysitting services in place of lawn care.) 59

62 JA Finance Park 3. Ask groups to name their new business. Explain that their lawn care business will need equipment: a lawn mower, electric trimmer, extension cord, hand clippers, a rake, and a broom. The cost of the equipment is a fixed cost. In other words, the cost of this equipment remains the same no matter how many lawns are mowed. The cost of maintenance, labor, and supplies are variable costs. Variable costs increase or decrease depending on the number of lawns mowed. The more lawns mowed, the more the business will spend on gasoline, taxes, advertising, and insurance, which are other variable costs. The worksheet indicates the results of market research in which neighbors were asked how much they would pay for lawn care services. Market research helps businesses provide the services people want at a price they are willing to pay. Vocabulary Fixed cost A business cost that remains the same, such as rent. Market research Gathering consumer preferences for products and services. Variable cost A business cost that increases or decreases, such as labor. 4. Assignment: Students perform the calculations on the Starting a Lawn Care Business Worksheet to determine if starting this business makes financial sense. Optional: Have students create a table for their calculations. Using the table, have them complete their calculations. Sample Table Summary and Review Digging Deeper Categories A B C Amount per lawn Number of lawns Number of weeks Total revenue After the groups have finished the worksheet, ask them individually if they would open a lawn care business. If not a lawn care business, what about another type? Discuss how asking potential customers how much they would be willing to pay for a service is valuable in helping make wise business decisions. 60

63 Starting a Lawn Care Business Income Extension Activity Student Worksheet, Page 21 Income Extension Activity 4 61

64 JA Finance Park Starting a Lawn Care Business Income Extension Activity Student Worksheet, Page 22 Answer Key $10,500 $7,200 $2,100 $10,185 $5,820 $1, ,185 5,820 1,455 $10,585 $6,220 $1,855 10,500 7,200 2,100 10,585 6,220 1,855 -$85 $980 $245 $30 per lawn, because that price results in the greatest profit, $980. The success of their summer work will be determined by the total income of their business. If the total income is negative (a loss), there won t be enough money to pay all wages and debts. 62

65 5 Extension Overview Students are introduced to the educational requirements for a variety of STEM (Science, Technology, Engineering, and Mathematics) occupations. Using the STEM attributes of creativity and problem solving, students create a pencil holder from a single sheet of paper. Teacher Introduction STEM Careers Activity Activity Time: 45 minutes Trained to be an architect, inventor, and engineer, James Dyson created his first consumer product, a wheelbarrow with a ball in place of a wheel, in It was followed two decades later by his now famous cyclonic vacuum cleaner outfitted with superfast digital motors. His products made him a billionaire. The need for technical expertise such as Dyson s continues to grow. Technical occupations are defined as those related to science, technology, engineering, and mathematics. STEM occupations in science, manufacturing, utilities, construction, technology, and financial services need workers with the ability to think logically and creatively when solving problems. Income Extension Activity 5 Not every STEM job requires a four-year degree. Educational requirements range from a high school diploma to a doctorate. Many STEM workers, however, have the appropriate math, science, and technology aptitudes and the specialized skills that demand high wages in the job market. Emphasize to students that in a STEM career, continued learning, often with graduate degrees and management training, helps with job security, pay raises, and promotions. 63

66 JA Finance Park Materials and Preparation oo Student Workbooks, Page 23, Stem Careers oo Pencils oo 8½ x 11 sheets of paper, two per student oo Scissors oo Rulers Stem Careers oo Option: Make golf tees in place of pencil holders; you ll need 8½ x 11 sheets of paper, masking tape, 2 golf balls STEM Career: Activity Steps 1. Review the Student Worksheet for this activity. 2. Read and discuss STEM occupations. Ask, What type of person do you think works in a STEM occupation? Possible answers: someone who is good at math and science; a creative and critical thinker who is persistent and doesn t give up easily; a problem solver; a person who takes complicated things and makes them usable and easy to understand; a collaborator. 3. Pick a highlighted job from the table on Page 66 of this guide and ask students to guess a) the job s primary responsibility, b) the educational requirements needed, and c) the annual salary. Compare responses with the actual information following the table. 4. STEM careers involve problem solving. Problem solvers: Consider all potential parts and related causes of a problem. Collaborate to gather information and seek solutions. Identify ideas that haven t been thought of before. 64

67 5. Distribute the sheets of paper. Students, working in pairs or individually, will use the STEM attributes of creativity and problem solving to form a functional pencil holder using only the materials provided (paper, scissors, and ruler). 6. Have students start by sketching the design on a sheet of paper. Using the specifications, have them build their holder. 7. Have students evaluate the advantages and disadvantages of each holder. 8. If time allows, ask students to write step-by-step directions on how to form their pencil holders, and swap them with a partner from another table or group. Partners will create the holder based on the direction steps. Option: Have students design and construct a golf tee using a single sheet of paper and masking tape. To prove workability, tees must support a golf ball for 5 seconds. Summary and Review Have students present their pencil holders to the class. Ask the following questions: ;; Did your original design work? If not, what were your modifications? ;; On a scale of 1 to 5, with 5 being the greatest, how interesting and creative is your design? ;; Is your pencil holder portable? Can it easily be moved from one desk to another? ;; Which pencil holder would get your vote for being the most profitable if sold in a retail store or online? Income Extension Activity 5 65

68 JA Finance Park STEM Careers Information on the highlighted careers appears below the table. Science Geological Engineer Chemist Field Biologist Marine Biologist Scientist Physicist Doctor Nurse Dentist Health Science, Agricultural, Food, or Forest Technician Technology Computer Support Specialist Computer Software Engineer Network and Systems Administrators 3-D Printing Engineer Manufacturing Materials Manager Information Security Analyst Engineering Aerospace Engineer Electrical Engineer Draftsperson Architect Mechanical Engineer Civil Engineer Environmental Engineer Auto and Aerospace Mechanic Construction Manager Mathematics Statistician Accountant Auditor Business Teacher Operations Researcher Mathematician City Planner Geological Engineer: Designs mines to safely and efficiently remove minerals such as coal and metals for use in manufacturing and utilities; a bachelor s degree from an accredited engineering program. The median annual salary for geological engineers was $94,040 in Chemist: Conducts tests and investigates the properties, composition, and structure of matter; at least a bachelor s degree in chemistry or a related field. The median annual salary for chemists was $72,610 in Physicist: Develops scientific theories to explain the properties of the natural world and may design computer systems and scientific equipment; a doctorate is needed for most research jobs. Many begin their careers in a temporary postdoctoral research position, which typically lasts two to three years. The median annual salary for physicists was $110,980 in

69 Forest Technician: Gathers data on water and soil quality, on insect damage to trees and other plants, and on other conditions that may pose a fire hazard; an associate s degree in forest technology. The median annual salary for forest technicians was $26,190 in Computer Software Engineer: Creates computer games; a bachelor s degree in computer science. The median annual salary for software developers was $100,690 in Information Security Analyst: Works to protect a company s computer systems from cyberattacks; a bachelor s degree in a computer-related field. The median annual salary for information security analysts was $90,120 in Aerospace Engineer: Designs aircraft, spacecraft, satellites, and missiles; a bachelor s degree in aerospace engineering or a science related to aerospace systems. The median annual salary for aerospace engineers was $107,830 in Draftsperson: Uses software to convert the designs of engineers and architects into technical drawings and plans; an associate s degree. The median annual salary for drafters was $52,720 in Environmental Engineer: Uses the principles of engineering, soil science, biology, and chemistry to develop solutions to environmental problems; bachelor s degree in environmental engineering or related field. The median annual salary for environmental engineers was $84,560 in Business Teacher: Helps students prepare for life after graduation; teaches academic lessons and various skills that students will need to attend college or enter the job market. A bachelor s degree is required, and public school teachers must have a state-issued certification or license. The median annual salary for teachers was $57,200 in Income Extension Activity 5 Mathematician: Uses high-level mathematics and technology to develop new mathematical principles; a postgraduate degree in mathematics. The median annual salary for mathematicians was $111,110 in (Source: Occupational Outlook Handbook, 67

70 JA Finance Park STEM Careers Income Extension Activity Student Worksheet, Page 23 68

71 6 Extension Overview Students read a brief history of Social Security and Medicare and review tax tables. Teacher Introduction Activity Time: 30 minutes The largest tax deducted from gross income is federal income tax. Income tax is used to pay for national defense, national parks, and other programs that benefit all citizens. In the United States, income is taxed on a graduated scale. This means that people who earn more generally have to pay a larger portion of their income in taxes. It s a complicated formula. If you want to play with the numbers, you can use the chart below, which shows how federal income tax is calculated for a single person in 2015, with taxes due in If taxable income is over Social Security and Medicare Activity But not over The tax is % Of the amount over $0.00 $9, % n/a $9, $37, $ % over $9,225 $37, $90, $5, % over $37,450 $90, $189, $18, % over $90,750 $189, $411, $46, % over $189,300 $411, $413, $119, % over $411,500 $413, or above $119, % over $413,200 Income Extension Activity 6 In mid-19th century America, families living in rural areas took financial responsibility for older members. By the 1920s, with more people moving away from farms to work and live in cities, the elderly found themselves without any means of support. 69

72 JA Finance Park The Great Depression in 1929 increased their plight. In August 1935, President Franklin D. Roosevelt signed the Social Security Act into law, which created a pension plan for older Americans. The official age to receive full benefits is 65 to 67, depending on the year the recipient was born. The government added spousal and survivor benefits in In 1965, Congress created Medicare, a social insurance program designed to provide older adults with affordable health care coverage. Together, these two programs are intended to furnish modest pension and health protection for senior citizens. The tax that funds both programs is commonly called FICA, an acronym for the Federal Insurance Contributions Act. The social welfare programs called Social Security and Medicare are not free. Workers, even the self-employed, are required to contribute a portion of their wages to fund pension and medical care for older Americans. The workers portion of what is called the FICA tax has increased over the years. In 2015, the employees portion of the Social Security tax was 6.2 percent of their gross earnings up to $118,500. They pay an additional 1.45 percent of their gross pay to fund Medicare. That means that 7.65 percent of a worker s paycheck is withheld to fund these government programs. Employers pay a matching amount. Self-employed workers pay the entire cost of the two taxes, 12.4 percent for Social Security and 2.9 percent for Medicare. Materials and Preparation oo Student Workbooks, Pages 24-25, Social Security and Medicare Social Security and Medicare Worksheets oo Optional: Computers and Internet access Social Security and Medicare: Activity Steps 1. Review the Student Worksheets for this activity. 2. Students read and discuss the history of Social Security and Medicare. 3. Assignment: Students calculate the taxes due for various income amounts. 70

73 Social Security and Medicare Income Extension Activity Student Worksheet, Page 25 Answer Key How much federal income tax, Social Security tax, and Medicare tax will you pay in 2015 if your income is: Income tax Explanation of income tax calculation: Social Security tax.062 x gross income, up to a maximum of $118,500 Income $190,000, use Row 5 on Page 69. Subtract $189,300 from $190,000. Multiply that number by 33% and add $46, Medicare tax.0145 x gross income, no cap $190,000 $46, $7, $2, $70,000 $13, $4, $1, $25,000 $3, $1, $ Income $70,000, use Row 3. Subtract $37,450 from $70,000. Multiply that number by 25% and add $5, Income Extension Activity 6 Income $25,000, use Row 2. Subtract $9,225 from $25,000. Multiply that number by 15% and add $ Summary and Review As stated on the official website of the U.S. Social Security Administration s (SSA) historical background page, All peoples throughout human history have faced the uncertainties brought by unemployment, illness, disability, death, and old age. In the realm of economics, these inevitable facets of life are said to be threats to one s economic security. Have students read about economic security throughout history by logging on to the SSA website at A documentary film about the origins of Social Security also can be viewed at the site. 71

74 JA Finance Park Social Security and Medicare Income Extension Activity Student Worksheet, Page 24 72

75 Social Security and Medicare Income Extension Activity Student Worksheet, Page 25 Income Extension Activity 6 73

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77 7 Extension Overview Whether buying a prom dress at the mall or a hamburger at the local diner, students in most states pay sales tax. Students will compute the sales tax and final cost for items in their shopping cart. Teacher Introduction Sales Receipt Analysis Activity Sales taxes are imposed by state and local governments. In conjunction with other taxes, sales taxes help states and cities run schools and libraries; 911 call centers; bus, water, and trash services; public pools; and community centers. All but a few states have a sales tax. Each state determines its own tax rate. For some, it is their principal tax source. Tax revenue is how governing entities provide goods and services to their citizens. Common exemptions to sales tax are groceries and prescription medications. Materials and Preparation Activity Time: 30 minutes Income Extension Activity 7 oo Sales receipts showing sales tax, to share with students oo Student Workbooks, Pages 26-27, Sales Tax Overview Worksheet and Sales Receipt Analysis Worksheet Sales Tax Overview Worksheet Sales Receipt Analysis Worksheet oo Optional: Computers and Internet access 75

78 JA Finance Park Sales Receipt Analysis: Activity Steps 1. Have students examine the sales receipts you brought to class. 2. Have students open their workbooks to the Sales Tax Overview Sheet on Page 26. Explain that sales taxes are imposed by state and local governments. States and cities need sales tax revenue to provide goods and services for their citizens. Services may include 911 call centers; bus, water, and trash services; public pools; and community centers. Some items, such as groceries and prescription medications, may be exempt from sales taxes, depending on what state you live in. 3. Review the Sales Receipt Analysis Worksheet on Page 27. Students will compute the sales tax and final cost for the items found in their shopping cart at the bottom of the worksheet page. Write the following example on the board to help them get started: How to Compute Sales Tax Convert the percent (%) to a decimal. Example: 7% =.07 Multiply the subtotal by.07. Example: $23.59 x.07 = $1.65 Add the computed sales tax to the subtotal for the total that the consumer pays. Example: $ $1.65 = $25.24 Summary and Review Sales tax rates for individual states can be found on each state s official government website. Have students research the current sales tax rate in five states of their choosing. Sites can be found by typing the state name followed by.gov in the browser window. For example, for the state of Colorado, the Web address would look like: Tax information can be found on the state s Department of Taxation and Revenue page. Have students include any local city and county taxes that are in addition to the state tax. 76

79 Sales Tax Overview Sheet Income Extension Activity Student Worksheet, Page 26 Income Extension Activity 7 77

80 JA Finance Park Sales Receipt Analysis Income Extension Activity Student Worksheet, Page 27 Answer Key ,