The reason citizens pay income tax is so that the government can have the funds to build libraries, roads, and fire and police stations. Income tax is also used for welfare and social security programs. In addition to income taxes, there are also sales taxes, corporate taxes and property taxes.
The two types of taxes that a taxpayer pays include federal tax and state tax. Federal income tax is used by the U.S government for the overall improvement of the country. Congress decides on a tax rate as well as how the federal income tax money is utilized before the Internal Revenue Service gathers the necessary taxes. State income taxes are used by individual States, but there are some that don't charge income taxes.
Any citizens who receive any type of income have to pay income taxes. Income can be gained from a salary, capital gains, gambling, operating a small business or investing in the stock market.
In 2011, it was estimated that almost 50 percent of the U.S. budget, which was approximately $1.1 trillion dollars, was made up of income taxes. To make sure they aren't paying too much in income tax, individuals should consult with an experienced and trusted tax professional or accountant.Learn More
To find the federal tax identification number, commonly known as an Employer ID number or EIN, check existing documentation, call the bank that handles your business accounts, or contact the Internal Revenue Service directly.Full Answer >
The largest portion of local government tax revenue in the United States comes from residential and commercial property taxes. Overall, local governments obtained more than 75 percent of their fiscal year 2010 tax revenues from property taxes, as reported by the U.S. Census Bureau. During that same fiscal year, New Hampshire was the state whose local governments relied most heavily on property taxes, with New Jersey and Vermont in second and third place, respectively.Full Answer >
Back taxes can be filed for up to 10 years after the tax year in which the resident neglected to file income taxes, according to ETaxes.com. After 10 years, the statute of limitations runs out for the Internal Revenue Service to collect back taxes in most states. In a few states, the statute of limitations never runs out, meaning back taxes can be filed at any point in the resident's life.Full Answer >
As of 2015, the fees for preschool are not tax deductible, but parents who work or go to school may be eligible for the child care credit on their taxes. The child care credit covers any fees for child care, including day care, preschool, before- and after-school programs for older kids, nannies and babysitters.Full Answer >