Cogito
Consumer Math · Chapter 6 · Lesson 3
Filing and Withholding
Why a refund is not a bonus.
12 problems · about 20 minutes · TEKS M.M.6.C
What this lesson teaches
The student explains withholding, refunds and the purpose of filing a tax return.
- Employers withhold estimated tax throughout the year.
- Filing a return settles the difference, as a refund or a bill.
- A refund is returned overpayment, not extra money.
Warm Up
Straightforward practice. Get the method working first.
5 problemsWithheld $6000, owed $5400. Refund in dollars?
Answer 600
Why $600.
What is a tax refund?
Answer A return of tax you overpaid during the year.
Why Your own overpayment, returned.
Withheld $7000, owed $6200. Refund in dollars?
Answer 800
Why 7000 − 6200.
Withheld $3000, owed $3500. Amount due in dollars?
Answer 500
Why 3500 − 3000.
Withheld $5000, owed $5000. Refund in dollars?
Answer 0
Why They match.
Build It Up
The same ideas with more to keep track of.
3 problemsIs a refund extra money from the government? 1 yes, 0 no.
Answer 0
Why It is your own overpayment.
Does money held as withholding earn you interest? 1 yes, 0 no.
Answer 0
Why It earns nothing while held.
$460 withheld monthly for 12 months. Annual withholding in dollars?
Answer 5520
Why 460 × 12.
Stretch Yourself
Mixed problems. Work out what kind of question it is before you start.
4 problemsPut the tax year in order.
Answer 1. Tell your employer your withholding details. 2. Tax is withheld from each paycheque all year. 3. File a return computing what was actually owed. 4. Receive a refund or pay the balance.
Why Filing happens after the year of withholding.
Withheld $8000, owed $7100. Refund in dollars?
Answer 900
Why 8000 − 7100.
The Refund: Withheld $5500, owed $5000. Refund in dollars?
Answer 500 dollars
Why $500.
The Bill: Withheld $4000, owed $4600. Amount still due, in dollars?
Answer 600 dollars
Why $600.