Taxes are monies paid by citizens and residents to federal, state, and local governments. The money collected from these taxes help fund for services provided by the government. It is the one of the main sources of government revenue. Types of taxes include income tax, sales tax, and property tax.
These are paid on a federal level and in some cases to state or local governments as well. "Taxable income" is essentially money obtained through wages, self-employment, and tips and from things like sale of property. The large majority of people pay their income taxes by having the money withheld from their paychecks. The proportion of income tax an individual is required to pay will vary according to earnings. Income tax rates are generally lower for those who make less money. However, any individual who earns an income, live in the United States and satisfies certain criteria is needed to file a tax return and also pay any taxes that they owe.
Social Security and Medicare taxes
These types of taxes are usually withheld from your paycheck. Social security benefits are provided for retired workers and their families, for disabled workers and their families and also for certain family members of deceased workers. Medicare (healthcare) taxes provides for medical services (this applies for people aged 65 and above). In the large majority of cases, a person will qualify for Social Security retirement benefits and Medicare benefits after having served a period of 10 years (or 40 quarters) over the course of your life. However, in the case of disability benefits for you or your family it is likely that you will require less than 10 years of work depending on your earnings.
Sales taxes are more or less state or local taxes and usually added to the buying cost of certain things. These taxes will be based on the cost of items and help fund for services provided by state and local government, such as roads, police, and firefighters.
These are also state and local taxes that are charged on your home and land. In most situations, these property taxes contribute to funding of local public schools and other services in the area.