This packet contains revisions of the following sections of the "Understanding Taxes" teacher's resource kit: complete revisions of lessons 3 and 4; updated student handouts for lessons 2, 9, and 11; new glossary; and revised software user's guide. Lesson 3, "From W-4 to 1040A," is designed to acquaint students with the basic tax-related forms they are likely to encounter. Lesson objectives include the following: students should be able to: (1) discuss the use and importance of Forms W-4, W-2, 1040EZ, and 1040A; (2) determine, when given sufficient information, whether an individual must file a return; (3) identify the specific tax return form that is most appropriate for each of a selection of taxpayers; and (4) define and use relevant concepts and terms in order to fill out Forms W-4, 1040EZ, and 1040A correctly and appropriately. The lesson includes 16 student handouts. Lesson 4, "State and Local Taxes," is designed to help students understand that state and local governments need revenues to provide goods and services for their residents. After participating in the suggested activities, students should be able to identify the kinds of taxes most commonly collected by state and local governments and give examples of goods and services most commonly provided by state and local tax revenues. Two handouts are provided. The Software User's Guide describes the following: equipment needed, setup, starting up, parts of the program, and main menu activities. (KC)