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Teaching Guide

Teaching Taxes

Make friends with the IRS.

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Two things are certain in life: death and taxes. But there's another sure thing in the classroom: Shmoop. Don't call H&R Block when you're trying to teach taxes to your class. Check us out instead.

In this guide you will find

  • personal and business tax activities.
  • a lesson exploring income tax reform. 
  • discussion questions about income tax, sin tax, health care… we're surprised there isn't a tax tax to talk about.

Our teaching guide makes it a little less taxing to talk about taxes. Just don't call us come April 15.

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  • 3-5 activities to complete in class with your students, with detailed instructions for you and your students. 
  • Discussion and essay questions for all levels of students.
  • Reading quizzes to be sure students are looking at the material through various lenses.
  • Resources to help make the topic feel more relevant to your 21st-century students.
  • A note from Shmoop's teachers to you, telling you what to expect from teaching the topic and how you can overcome the hurdles.

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Instructions for You

1. Sort your students into small groups and give them five minutes to decide what sort of business they would like to open. It must be a two-person operation; they must hire one—but only one—employee.

2. Provide your students with copies of the federal schedule C—the tax form for calculating profit or loss from a business. You can download copies here. Directions for the form are available here.

3. Tell them that their gross income for the year was $150,000 and that they need to reduce their tax liability to $75,000.

4. Tell them to fill out Part II, beginning with necessary costs (employee wages, office or shop mortgage or rental, vehicle expenses, etc.).

5. Once they have realistically itemized their necessary costs, they can add other expenses designed to reduce their tax liability and strengthen the business. For example, they may decide to spend more on advertising or build employee loyalty by starting a profit-sharing program.

6. Have the groups present their tax return to the rest of the class; the class should critique the group’s tax and growth strategy.

Instructions for Your Students

Businesses are required to pay taxes, but the federal tax code provides all sorts of ways for a businessperson to strategically invest their resources. Tax planning is an important part of developing a business plan. Deciding whether to spend more on payroll or advertising, or insurance or machinery, can be a tough call. If you choose wisely though, the money you spend will grow your business and reduce your taxes.

Be ready to make these tough decisions.

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