Read a paycheck and fill in a simple income-tax form

Grade 12 Social Studies Worksheet

Circle the best answer.

1. Read this first

   Use this

   Cards A and B on average and marginal tax rates (card A is real data; card B is made up). Card A, "2026 federal income tax brackets, single filers". Who made it: the Internal Revenue Service (irs.gov), read November 14, 2026. Table, columns Rate | Taxable income over: 10% | $0; 12% | $12,400; 22% | $50,400; 24% | $105,700. Note: each rate applies only to the part of taxable income inside its band. Taxable income is wages less the standard deduction, which is $16,100 for a single filer in 2026. Card B, "Two workers (made up)". Who made it: written for this sheet. Summary in our words, not a quotation: Worker X has wages of $45,000, so taxable income of $28,900. Worker Y has wages of $70,000, so taxable income of $53,900. Both are single filers. Payroll tax on wages is 7.65 percent for both.

2. 1.

   Bo works out Worker Y's income tax from card A and compares it with the 22 percent bracket. Which statement is right?

   • Tax is $6,570, which is 22 percent of income, since the top bracket sets the rate paid
   • Tax is $6,570, an average of 9.4 percent of taxable income, since wages are $70,000
   • Tax is $6,570, an average of 12.2 percent of taxable income, below the 22 percent top rate
   • Tax is $11,858, since Worker Y's top bracket of 22 percent applies to the whole $53,900 of income
3. 2.

   Worker Y gets a $5,000 raise. Esme counts income tax at the top rate and payroll tax. How much of it does Worker Y keep?

   • $3,517.50: income tax of $1,100 at 22 percent and payroll tax of $382.50
   • $4,017.50: the raise is taxed at the 12 percent rate, plus payroll tax of $382.50
   • $4,617.50: just payroll tax applies, since the standard deduction covers income tax
   • $3,900: the raise is taxed at 22 percent for income tax and nothing more
4. 3.

   A student says a raise into the 22 percent bracket can leave a worker with less take-home pay. Zee tests it against card A. What is the verdict?

   • Right: Worker Y's tax is higher than Worker X's, so a higher bracket costs money
   • Wrong: only income above $50,400 is taxed at 22 percent, so take-home pay still rises
   • Wrong: the 24 percent bracket starts at $105,700, so only that bracket is risky
   • Right: crossing into 22 percent raises the rate on all income, which can exceed the raise
5. 4.

   Pia compares Worker X's tax ($3,220) with Worker Y's ($6,570) from card B. Which statement fits?

   • Worker Y's tax is 83 percent higher, the ratio of the top rates 22 to 12 on card A
   • Worker X pays a higher share of wages than Worker Y does, since X earns less
   • Worker Y's tax is 56 percent higher, just as wages are, so each pays the same share
   • Wages are 56 percent higher for Y, but income tax is 104 percent higher: progressive

6. Use this

   Cards A to C on who bears the payroll tax (card A is real; cards B and C are made up). Card A, "Payroll tax rates". Who made it: the Internal Revenue Service (irs.gov), read November 14, 2026. Excerpt: "The current tax rate for Social Security is 6.2% for the employer and 6.2% for the employee, or 12.4% total." Card B, "Who bears a tax (in our words)". Who made it: written for this sheet. Summary in our words, not a quotation: When a tax is placed on a market, the side whose quantity responds less to price bears more of it. In a simple model, the share of a tax borne by workers is Ed ÷ (Ed + Es), where Ed is the elasticity of labor demand and Es the elasticity of labor supply, both written as positive numbers. The same share applies to a tax cut. Card C, "Two labor markets (made up)". Who made it: written for this sheet. Table, columns Market | Ed | Es: Market M | 0.8 | 0.2; Market N | 0.2 | 0.8.

7. 5.

   Kira applies card B to Market M. What share of the 12.4 percent Social Security tax do workers bear?

   • About 80 percent, since labor supply responds less than labor demand
   • 100 percent, since employers pass the whole tax on to workers
   • 50 percent, since the law splits the tax into two halves of 6.2 percent
   • About 20 percent, since the employer sends the tax in to the government
8. 6.

   Tala compares card A with card C. Which statement about who bears the tax is best?

   • The law splits the tax equally, but the burden follows the elasticities, not the check
   • The burden falls on the less responsive side in Market M, but in Market N it splits in half
   • The burden follows the law, so each side bears half of the tax in both markets M and N
   • The burden falls on workers in both markets, since employers can pass the costs on to pay

9. Use this

   Cards A and B on payroll tax and wages (card A is real; card B is made up). Card A, "Employee payroll tax rules, 2026". Who made it: the Internal Revenue Service (irs.gov) and the Social Security Administration (ssa.gov), read November 14, 2026. Summary in our words, not a quotation: The employee pays Social Security tax of 6.2 percent on wages up to $184,500. The employee pays Medicare tax of 1.45 percent on all wages. Wages above $200,000 in a year also carry an Additional Medicare Tax of 0.9 percent, paid by the employee. Card B, "Three workers (made up)". Who made it: written for this sheet. Table, columns Worker | Wages in 2026: X | $50,000; Y | $184,500; Z | $400,000.

10. 7.

    Milo applies card A to card B. Which statement about payroll tax as a share of wages is right?

    • It is 7.65 percent for each of the three workers, since the rates on card A do not change
    • It is 7.65 percent for X and for Y, then falls to about 4.8 percent for Z
    • It is 9.2 percent for Z, since Z's Medicare and extra tax add up on top of 7.65
    • It rises for Z, since Z pays the extra 0.9 percent as well as the other taxes
11. 8.

    A writer says payroll tax is regressive for very high earners. Jun tests the claim against card A. What is the verdict?

    • Not supported, since Z pays more dollars than X, so the tax cannot be regressive
    • Supported above the cap: the 6.2 percent stops at $184,500, so the share of wages falls
    • Supported for each earner, since payroll tax takes a bigger share at $50,000 and $400,000
    • Not supported, since Medicare tax has no cap and so raises the share of wages above $184,500
12. 9.

    Worker Y earns exactly $184,500. Ari applies card A to Y's next $1,000 of wages. What payroll tax does it face?

    • $76.50, since the full 7.65 percent applies to each dollar of wages Y earns this year
    • $0, since Y has reached the cap and payroll tax stops for the rest of the year
    • $23.50, since Y also pays the 0.9 percent Additional Medicare Tax from this point
    • $14.50, since the 6.2 percent stops at $184,500 but Medicare's 1.45 percent goes on
13. 10.

    A student says raising the $184,500 cap would add tax only from workers who earn above it. Ren tests the claim. What is the verdict?

    • Supported by card A: workers under the cap already pay 6.2 percent on all wages
    • Not supported: a higher cap would tax wages above it at Medicare's 1.45 percent only
    • Supported: workers above the cap can afford it, and so the tax would not change behavior
    • Not supported: a higher cap would also raise the Social Security tax paid by Worker X