Paying Taxes in America

Income Tax

• The money you get from wages and self employment is called "Taxable Income". A certain amount of this money is withheld from your paycheck. The amount of tax you pay depends on how much you earn. The rate of income tax depends on how much an individual earns. In America, people earning money and meeting certain criteria should file a tax return and pay taxes they own.
• Each tax year is from January 1st to December 31st. The last day to file your income tax return is April 15th.
• Social Securitytaxes provide benefits and services to retired workers, disabled workers, deceased workers and their families.
• Medicare Taxespay for the services required by the people over the age of 65 years. To enjoy these Social Security benefits and Medicare benefits a person needs to work for about 10 years

Sales Tax

Sales taxes are local and state taxes which are added to the amount while buying items. This tax depends on the cost of the item. These taxes provide services to the police, firemen and maintenance of roads.

Property Tax

Tax to be paid for your property like house and land. This Tax provide support to government schools and other services.

• Income Tax in USAIf you are working in a company, then your employer will deduct certain amount of income tax from your paycheck. The deducted money will be submitted to the concerned government departments in frequent intervals of time. The W-2 form is sent to you by your employer and reports all your wages and deductions.
• W-2 FormForm W-2, Wage and Tax Statement, is used in the United States income tax system. It is a document on which an employer reports the wages for a specific employee for the tax year.
• W-4 FormA form that is used by the United States Internal Revenue Service to help your employer determine certain amount of your wages to be withheld so that this withheld money can go to the government. The W-4 form is used by the employee to report to the employer the number of allowances to be used in calculating the employee's payroll deductions. Information such as marital status and number of dependents can be provided by the employee to indicate the number of with-holdings the employer should use when calculating federal payroll tax deductions.

The rates you are supposed to pay on the money you earn is as shown