How do you calculate tax?

Question

My son is just learning this stuff and I want to find an easy way to explain to him, etc.

Answer 1

sales amount times the tax

$ x Tax % = Tax amount

Answer 2

Tax is always percentage of a given amount. You could explain to him what kind of tax it is and that the government determined how much of a percentage people should be paying.

Answer 3

depends which state you live in.  Tax rates vary.  typically you multiply the cost of the object by the % tax.  so lets says it's 10% tax and it's a $45.59 object

$45.59 x .1 = $4.56 (rounded up to second decimal place)

lets say you have 12% tax

$45.59 x .12 = $5,47

Answer 4

Do some consumer education.

Ask him what he thinks is a good salary.  Ask him what he thinks he'll have to pay in taxes.  Hand him a W-4 and tell him to fill it out.  Then go to www.paycheckcity.com and pretend to get a paycheck.  I know I had a click moment when I got my first adult paycheck and saw how much disappeared.  (I got hit with federal, state, local, fica and mc.  30% gone, off the bat.)  Multiply by a full year and then hand him a 1040EZ (and your state's equivalent) and have him fill it out.  Was the withholding enough or did he owe?

Do this again with an even better salary, interest income, stock sales, marriage, kids.  (Or have him change the W-4 to have more withholding allowances and see the problem when you owe.)

You could do this in conjunction with the old Life game (but no more than one or two tax returns per weekend).

Answer 5

Multiply the taxable amount by the tax rate.