By: Katherine Munoz

1. By: Katherine Munoz

2. A tax is a financial charge imposed on an individual or a legal entity by a state or function equivalent of a state. It is the revenue that the government receives in order to pay the salaries of its employees and the services it provides for its citizens. There are different kinds of taxes. Some are income tax, property tax and sales tax. Taxes consist of direct tax or indirect tax and may be paid in money or as its labor equivalent. The method of taxation and the government expenditure of taxes raised is often highly debate in politics and economics. What Are Taxes?

3. Annual tax levied by the Federal government, most states, and some local governments, on an individual’s or corporation’s net profit. Individual income taxes often tax the total income of the individual, while corporate income taxes often tax net income. When tax is levied on the income of companies, it’s called a corporate tax. A consumption tax charged at the point of purchase for certain goods and services. It is usually set as a percentage by the government charging the tax. Most sales taxes are collected by the seller, who pays the tax over to the government which charges the tax. Some taxes are also charged on the sales of services Sales Income Tax Tax

4. Property Tax • Local tax assessed on property owned, such as real estate or automobiles. • It can be defined “tax imposed by municipalities upon owners of property within their jurisdiction based on the value such as property”. • The three types of property are: Land, Improvements to Land, and Personal. • The taxing authority requires or performs an appraisal of the monetary value of the property, an tax is assessed in proportion to that value. • The property tax rate can be given as a percentage or as a permille (amount of tax per thousand currency units of property value.

5. Taxes are gathered so that the roads that we drive on can be built. Also, it provides for police and the fire departments. They are run by our taxes and without them we wouldn’t be able to put out the fires or stop the criminals. Taxations also pays for wars and for border protection. Our Medicaid, agriculture, foreign affairs, veteran benefits, environmental and natural resources are also paid with those taxes. They are also used so that schools can be run. Without taxes none of us would have a formal education. What are they used for?

6. When Are Taxes Due? • Your tax return must be postmarked no later than April 15th or sent no later than that date if you’re filing electronically. • When April 15th falls on a weekend, the deadline is pushed to the following business day.

7. Consequences of Not Paying Taxes • If the government or tax services find out you haven’t paid, you will be fined whatever you owed as well as other costs. • When the fine is given out, there is a fixed time period which the payment has to be made. • After the time has expired, usually the authorities will have you taken to court and you will have to explain why you have no paid. • In some cases, after the penalty and court, jail time is also used. • Also, the authorities may freeze any assets you might have first as part payment of whatever you owe them. • Another consequence is that you will have a legal history of tax evasion for a long time and it will be difficult to apply for a new job in the financial or business sector.

8. A dependent is a person other than the taxpayer or spouse who entitles the taxpayer to claim a dependency exemption. Each dependency exemption decreases income subject to tax by the exemption amount. The exemption amount changes each year. To claim a dependency exemption for a qualifying child, all of the qualifying child dependency tests must be met: Dependent Taxpayer Test Joint Return Test Citizenship Test Relationship Test Age Test Residency Test Support Test Dependents

9. Tax Tips! • FILE: You might think you make too little money to file, but if you’ve had money withheld from paychecks, you have a refund coming. • START EARLY: Even if you haven’t received your W-2s, your final pay stub will have the pertinent tax information, such as income and how much was withheld. Taking a look at your situation, will help you know which issues might apply to your return. • PRACTICE: Even if you’re filing electronically, many people find it easier to fill out the paper forms and find your mistakes on paper. • DETERMINE WHERE YOU LIVE- If you’re going to college in one state and spending the summer at home, you have could have two states vying for your tax dollars.

10. TAKE EXTRA CREDIT: College students get a little help from the government in the form of credits and deductions. Whoever claims the student as a dependent is the one who is eligible for the credit. • Hope Scholarship Credit- Gives you take credit for up to 100 percent of your first $1,000 in tuition and fees and up to 50 percent for the second $1,000. • Lifetime Learning Credit- Gives you a tax credit equal to 20 percent of your tuition and certain related expenses up to $10,000. The credit maximum is $2,000. • Higher education expenses deduction- The deduction could be as much as $4,500 for families that meet the earning guidelines.