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What You Need To Know About Types Of Taxes
For you to maintain your job or purchase any item you need to pay taxes. For the government to be operational every year they rely on the taxes provided. Federal taxes amount to about 2 trillion dollar in the US. The total increases when you include other forms of taxes. Keep reading to know more about the different forms of taxes that you are should plan to pay.
Income taxes is the most familiar one among many people who work. It is a requirement to file tax returns every year. You will realise that majority of qualify to get a tax refund. When you have a proper understanding of their tax deductions and credits that you qualify for it is possible for you to get much more from your taxes. Income taxes of different type that is the federal, state and local income, FICA and payroll tax. The percentages are not the same depending on the state you currently live in.
Another form of tax is the capital gain taxes which means that anytime you want to sell an asset it is a requirement for you to pay taxes. The time you have owned the asset will determine the amount to pay. The short-term capital gain rates is meant for individuals who have owned properties for one year or less. On the other hand, long-term capital gain taxes are the best for individuals who have owned the property beyond one year and they come at a lower rate.
Investment taxes for those who enjoy trading stocks and bonds. Before investing you will fill out a form that shows you have ordinary income and qualified to do investment.
There is also property taxes that is calculated depending on the value of your home and land. Your state will determine what percentage will be paying yearly. The money is budgeted for local issues that occur in your area like sewage drainage, road maintenance, schools and other things. Estate tax is meant to be paid by whoever will inherit your assets when you are no longer there.
Inheritance and wealth that is similar to the estate one because it is transferred to a different person when you no longer there. It is only in six states. There is good and services tax which sellers are taxed when they purchase goods and services.
In addition, you will pay for sales tax upon purchase of an item at the point of sale. Value added tax is applicable for every production process stage depending on the value of the product. You will note that everyone pays different taxes each year. It is important to have a good understanding of taxes so that you can budget well.