why do you have to pay income tax
Every around April 15, you'll hear adults of all ages groan about Бtax day. " That's because
and state tax forms are due around that time. But have you ever wondered why you have to pay taxes? In the United States, we have governments at the local, state and national ( ) levels. These governments have various parts to them, including legislators (who make laws), executives (who enforce laws), and many others. The money these government workers receive to do their jobs comes from taxes. Taxes take many forms, too. When you work at a to make, you pay taxes. Depending on how much money you make, a certain (part) of the money you make is (kept out of your paycheck and sent to the government). When you buy things at a store, you also usually pay sales tax, which is a of the cost of the item charged by the store. If you own, you also pay taxes on the value of your.
Paying your taxes is considered a, although doing so is also a requirement of the law. If you do not pay your taxes, the government agency that oversees taxes Б the Internal Service or IRS Б will require you to pay your taxes or else face penalties, such as fines or going to jail. 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 and. Tax money helps to ensure the you travel on are safe and well-maintained. Taxes fund public libraries and parks. Taxes are also used to fund many types of government programs that help the poor and less, as well as many schools! Each when Бtax day" rolls around, adults of all ages must report their to the IRS, using special tax forms. There are many, many laws that set forth complicated rules about how much tax is owed and what kinds of special expenses can be used (Бwritten off") to lower the amount of taxes you need to pay.
For the average worker, tax money has been from paychecks throughout the. On Бtax day," each worker reports his or her and expenses to the IRS. Employers also report to the IRS how much they paid each worker. The IRS compares all these numbers to make sure that each person pays the correct amount of taxes. If you haven't had enough tax money from your checks throughout the to cover the amount of tax you owe, you will have to send more money (Бpay in") to the government. If, however, too much tax money was from your paychecks, you will receive a check (get a Б ") from the government. This is the system your employer or pension provider uses to take Income Tax and National Insurance contributions before they pay your wages or pension.
Your tells your employer how much to deduct. Your tax code can take account of, so if you owe tax on them (for example for the State Pension) itБs usually taken automatically from your other income. If the State Pension is your only income, HM Revenue and Customs ( ) will write to you if you owe Income Tax. You may need to fill in a Self Assessment tax return. If your financial affairs are more complex (for example youБre self-employed or have a high income) you may pay Income Tax and National Insurance through. YouБll need to fill in a tax return every year. You must also бе1,000 from self-employment бе2,500 from other untaxed income, for example from tips or renting out a property if your income from renting out a property was between бе1,000 and бе2,500.
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