Taxes help America operate, and for that I have a love hate relationship with them. I love them because tax money keeps the roads nice (unless you live in Philly), they provide funding for public schools and a lot of other great things and I hate them because they make my paycheck go from the size of a king bed to the size of a twin.
The goal of this post is to give a small intro to what taxes are. It affects all of us; so we should all have a basic knowledge of this topic.
Taxes are a special fee that the government requires people to pay. In order for America to operate it needs money, and as a way for it to get money it collects taxes from individuals and businesses.
The government requires everyone who receives income in the United States to pay taxes. Income is typically the money you make from your job, but can also include things like alimony, child support, lottery winnings, gambling winnings, insurance claims and so on. Luckily for us, some of these forms of income cannot be taxed (exempt), such as child support and insurance claims, but overall majority of our income is subject to tax.
When you first start a new job, you are required to fill out a W-4 form and based off of the information you fill out, a certain amount of tax is withheld from each of your paychecks. Often times, there is TOO MUCH money withheld throughout the year, which results in an overpayment, and therefore we must be given a refund. On the flip side, sometimes too little is taken out which will result in you owing the government money.
At the beginning of each year (January 15 – April 15), everyone who has received income in the prior year must file his or her taxes. When we file our taxes we find out if we have paid too much or too little and we will either be rolling in dough, soon after, or scraping our pennies together to pay the IRS.
It’s almost about that time to file taxes so with this new information, I hope that you can go into the process with a little more confidence.
By Khadija Bingham
