Taxes are quite Taxing

Support Local Journalism


Subscribe


Every year around April 15 you can almost bet on people being in a bad mood, the reason behind the long faces? It’s the deadline to file taxes. If you’re not getting money back you are more than likely stressed, frustrated and on top of it, you don’t understand why you have to pay even more money to have someone file your taxes. Have you ever wondered why you have to pay taxes in the first place? What is the IRS? Or how is the money you are giving away each paycheck used by the government?

In the United States, we have governments at the local, state and national (federal) levels. These governments have various parts to them, including legislators (who make laws), executives (who enforce laws), judges, 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 job to make money, you pay income taxes. Depending on how much money you make, a certain percentage (part) of the money you make is withheld (kept out of your paycheck and sent to the government).

The same thing goes when you buy things at a store, you also usually pay sales tax, which is a percentage of the cost of the item charged by the store. If you own property, you also pay property taxes on the value of your property. If you find yourself in Oregon you will notice they have no sales tax but they have much higher property taxes, a higher income tax and things like registering your vehicle will cost much more than if you were living in Idaho.

Paying your taxes is considered a civic duty, although doing so is also a requirement of the law. In November 2016 a ballot was cast and the vast majority of Americans believe the same thing, that paying taxes is a “civic duty,” according to a survey released by Time. “In the CNN/ORC poll, 86% of registered voters surveyed believe that paying taxes is an American civic duty, while only 12% said that taxes are an “unnecessary burden” which are best avoided,” said Time.com.

If you do not pay your taxes, the government agency that oversees taxes — the Internal Revenue Service or IRS — will require you to pay your taxes or else face penalties, such as fines or going to jail. This was seen in the 2007 imprisonment of Martha Stewart who is now a convicted tax evader. Before doing jail time for insider trading, Stewart was forced to pay $220,000 in back taxes and penalties to the State of New York, learning the hard way that East Hampton mansions also generate taxes.

The money you pay in taxes goes to many places, even places you can’t physically see. In addition to paying the salaries of government workers, tax dollars 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 and they are also used to fund many types of government programs that help the poor and less fortunate, as well as schools!

A local example of tax dollars possibly being used is with the upcoming $64 million dollar Emmett School District bond set to be voted on in May. If passed it would allow Emmett to get a grip on growth, build a brand new high school, update other facilities and help the city to be proactive rather than reactive to the influx of people coming into the valley.

Each year when “tax day” rolls around, adults of all ages must report their income to the IRS, using special tax forms. There are laws that set forth complicated rules about how much tax is owed and what kinds of special expenses can be used (“written off”) to lower the amount of taxes you need to pay. Things like charitable donations, college tuition expenses, medical expenses, 401(k) contributions, child care and dependent tax credit are a few examples of what can be written off. If you are unsure of what counts as being a tax deduction make sure to spend some time online or talking to a consultant.

For the average worker, tax money has been withheld from paychecks throughout the year. On “tax day,” each worker reports his or her income 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 withheld from your checks throughout the year to cover the amount of tax you owe, you will have to send more money (“pay in”) to the government. If, however, too much tax money was withheld from your paychecks, you will receive a check (get a “refund”) from the government.

It’s always better to pay too much over the course of a year than to have to owe once April 15 hits, the worst case scenario is ending up like Martha Stewart. Always be honest and transparent about where your money is going and you will be just fine.

Load comments