JODY SALSMAN: Hello. My name is Jody Salsman, and I am one of the professors on Accounting 310, Federal Taxation I. You will see that this is a basic introduction to federal taxation, and this class will mostly focus on the taxation of individuals. We will get into some business concepts that also apply to corporations. But for the most part in this class, we will focus on the individual taxation. 

If you continue on to Accounting 410, which is an elective class in the accounting major, you will get much more in-depth into the different taxes for corporations, such as the C corporation, the S corporation, and partnerships. But this one, again, will focus mostly on individual taxation. 

So this is going to be a little mini series of introduction videos. You will see it's not going to be an in-depth lecture style recording. It's just going to be an introduction to the chapter and the topics that will be in each of the chapters that we are going to go through. 

You will see in Canvas that we do have a link there that you can contact us as a professor, whoever your instructor may be, on this course for the semester. You can reach us there, or you can reach us through your regular Penn State email. If you have any questions, need any help any homework help, or any conceptual problems, we're happy to help you there. 

You'll also see that we do contract with Tutor.com. So if you are struggling in the class and you need some help outside of what Penn State has for you, we also do contract with Tutor.com. And you're welcome to use their services as well. 

You'll see in the syllabus, we do have several topics that we will cover in this class. So we will have a little mini introduction for each concept. And if we find that there are several students that have a problem with a particular concept, we can always do a recording and get more in depth with those concepts there. 

So we are very excited to have you for the semester. We look forward to communicating with you and teaching you about taxes. So if you have any questions, please reach out and we're happy to help. Have a great semester. 

JODY M. SALSMAN: We are going to go ahead and get started now. We are in our first unit here, which is going to be the introduction to tax. And coincidentally, our first chapter is also called "An Introduction to Tax." So the first chapter here is going to be an overview of some main concepts of tax. So who cares about taxes, what qualifies as a tax, and then we'll get into some other concepts here. 

So why do we need to learn about taxes, first of all? So in order to make some informed decisions regarding our personal finances, our investments, some business decisions, political decisions, it's very helpful to have a basic understanding of taxation. So that's why we are going to study the concept of tax. And then we want to get into, OK, so what then qualifies as a tax? So why do we have taxes? 

They are so that we can run some governmental programs. And what then is going to qualify as a tax? So we have different types, such as income tax. We have sales tax, we have property taxes. There's a whole slew of different types of taxes that we can get into. 

You'll be able to classify them as federal, state, and local as well. You want to be able to identify those different types. And then we're also going to get into a concept of the tax rate structures. 

So you'll see that there are some tax rate structures. There's three different types. We will get into those in this chapter. And you'll want to be able to describe those so that we can calculate a tax. 

So one of the concepts that past students have had some trouble with in this class is the concept of marginal, average, and effective tax rates. So there's those three different tax rates. And we want you to be able to identify the differences between them and also to calculate them. 

So you may have heard the concept of the tax bracket. So what does the tax bracket mean? That means, what is the tax rate that you are being charged? 

So when you see the tax table, you will see what the rate is that your income falls into. And that is going to be considered your marginal tax rate. So that's the percentage of tax on the next dollar made. 

Then we get into average tax. So what is the average tax rate? The average tax rate is the amount of tax that you owe divided by your taxable income. So how much of your income is taxable? 

You'll want to take your tax owed divided by that taxable income amount. So this is going to be less than your marginal tax rate because not all income is taxed at that highest marginal tax rate. You'll see, with the tax table, that some of your income is taxed at the lower rates. And we'll get into this concept more in chapter 4. And you will see that we have a video there that will show you how to use that tax table and show you exactly how to calculate what the tax should be. 

So that would be the average tax rate, the amount of tax owed divided by the taxable income. And then we have the effective tax rate. So this may be equal to your average tax, or it may be less if you have some tax exempt income. So the effective tax rate is going to be your tax owed divided by your taxable plus your non-taxable or tax exempt income. So if you have some tax exempt income, this effective rate is going to be even lower than your average tax rate. 

So there's the marginal, the average, and the effective. There is a practice problem in this chapter here so that you can try these concepts on your own. And then you'll see that at the end of the chapter, we talk about evaluating some alternate tax systems. So if you would be in governmental accounting or work at the IRS, you may be in charge of trying to decide what type of tax to impose and evaluating different tax systems. 

So we want you to just be able to see how these concepts are implemented and what our government goes through in order to implement a tax system. So if you have any questions, please reach out to us. That's what we're here for. We're happy to help you. And go ahead and begin on chapter 1. Have a great day.