WHAT I KNOW ABOUT TAXES

WHAT I KNOW ABOUT TAXES

What are taxes?

A compulsory contribution to state revenue, levied by
the government on workers' income and business profits,

or added to the cost of some goods, services, and
transactions.

What is a community?

A group of people living in the same place or having a
particular characteristic in common.

What are the benefits of taxes?

The money you pay in taxes goes to many places. In
addition to paying the salaries of government workers,
your tax dollars also help to support common resources,

such as police and firefighters. Tax money helps to
ensure the roads you travel on are safe and well-
maintained. Taxes fund public libraries and parks.

What is federal income tax?

Federal income tax is a tax levied by the United States
Internal Revenue Service (IRS) on the annual earnings of

individuals, corporations, trusts, and other legal
entities. Federal income taxes are applied to all forms of

earnings that make up a taxpayer's taxable income,
such as employment earnings or capital gains.

What are state income tax?

State income tax is a direct tax levied by a state on your
income. Income is what you earned in or from the state
and, in your home state, it may mean all your income

everywhere. Just like federal tax, state income tax is
self-assessed.

What is payroll tax?

Payroll taxes are taxes imposed on employers or
employees, and are usually calculated as a percentage
of the salaries that employers pay their staff. Payroll
taxes generally fall into two categories: deductions from
an employee's wages, and taxes paid by the employer

based on the employee's wages.

How do employers contribute to payroll tax?

Employers' Responsibility for FICA Payroll Taxes. An
employer's federal payroll tax responsibilities include
withholding from an employee's compensation and
paying an employer's contribution for Social Security

and Medicare taxes under the Federal Insurance
Contributions Act (FICA).

What is a property tax?

Property tax is a real estate ad-valorem tax, considered a
regressive tax, calculated by a local government, which is

paid by the owner of the property. The tax is usually
based on the value of the owned property, including
land. The local governing body will use the assessed tax
to fund water and sewer improvements, provide law
enforcement and fire service and other items deemed

necessary.

What is a sales tax?
a tax on sales or on the receipts from sales.

What is an excise tax?

An excise tax is a legislated tax on specific goods or
services at purchase such as fuel, tobacco, and alcohol.
Excise taxes are international taxes imposed within a

government infrastructure rather than international
taxes imposed across country borders. A federal excise

tax is usually collected from motor fuel sales, airline
tickets, tobacco, and other goods and services.

What are the two most important things to know about
taxes?

New Tax Form.

Lower Tax Rates.