So, two days from today, on April 15, it is Tax Day here in the States. That’s when we have to tally up our income for the last year and give a portion of money to the Government.
< sarcasm > Yeah! < / sarcasm >
Well, most of the time you have to give them a portion of your hard-earned money. Actually, you’ve been giving them a portion of your hard-earned money all along. A portion of your wages is taken out and put aside for the Government as withholdings. At the end of the year, when you calculate your taxes, you see how much withholdings have been taken out of your pay.
Here’s an example. These numbers are made up to keep the math easy. Say you made twenty thousand dollars ($20,000) last year. Let’s say that five percent (5%) of what you make is taken out for withholding. So,
20,000 X .05 = $1,000 taken out in withholdings.
Based on your income, there are tables published by the Internal Revenue Service (IRS) that tell you how much tax you owe for the year. Say, the table says you owe $1200 in tax on $20,000. Now, you owe the Government an additional $200 since you’ve only had $1000 taken out for withholding.
Now, there are many other factors that can effect the outcome. You may have gotten interest from a bank account, or made money on investments. You may or may not have had withholdings taken out of these. You might be able to take deductions, which lower the amount of taxes you owe. You can deduct things like donating to charity, or purchasing office supplies for your business. Say you made $300 in charitable donations. You get to take that off the amount of tax you owe.
$1200 – $300 = $900.
If you’ve already had $1000 withholdings taken out of your paycheck over the year, and you only owe $900, then congratulations! You get $100 from The Government.
We waited to the last minute to get our taxes done this year. Your taxes must be filed by April 15, so we’re getting in just under the wire. We were going to have one place do them for us, but they took so long in calling us back to schedule an appointment that they finally called us after they finished preparing taxes for the year. We got a different place to do them and our appointment was this evening. It turns out we have to pay Federal taxes this year. And we’re in a new State, so we have to pay State taxes as well, something we didn’t have to do in Texas.
I wouldn’t mind paying taxes if I got more of a say in how they are spent by The Government. As it is, The Government will spend it however they please. I’d like to be able to say “Give half of my money to NASA and half to to public education” or some such. Ideally I get that say by electing Senators, who are supposed to listen to their constituents and act in their interest, but it doesn’t usually work out that way.
Anyway, we’re done for the year and don’t have to worry about it again until next year.
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