Taxes
Taxes
What are taxes?
What are the types of taxes? There are three types: taxes on what you earn, buy and own.
Taxes on what you earn include individual income tax, such as taxes on your salary at every paycheck, individual investments, and other household income. The tax rates on these increase as the income increases, meaning it is progressive.
Taxes on what you buy include sales tax, such as taxes on retail goods and services. This tax can impact a consumer's shopping habits as this is different by state and by service.
Taxes on what you own include property taxes, which is a primary source of revenue for local and state governments. This tax helps fund public schools, roads, law enforcement, and other government services. This tax also applies to estate and inheritance taxes.
Filing Taxes
The IRS has a program that allows people to prepare and file their taxes for free!
Who needs to file?
Filing Status |
Age |
Gross Income |
| Single | Under 65 | $10,400 |
| Single | 65 or older | $11,950 |
| Married, Filing Jointly | Under 65 (both spouses) | $20,800 |
| Married, Filing Jointly | 65 or older (one spouse) | $22,050 |
| Married, Filing Jointly | 65 or older | $23,300 |
| Married, Filing Separately | Any | $4,050 |
| Head of Household | Under 65 | $13,400 |
| Qualifying Widow(er) with Dependent Child | Under 65 | $16,750 |
| Qualifying Widow(er) with Dependent Child | 65 or older | $18,000 |
Tax Documents
There is a free quiz created by the IRS to determine if you need to file your federal tax return and if you will receive a return. Find the quiz linked here!
Tax Refunds
A tax refund is given when a mistake has been made and you have paid more income tax than necessary. Thus, the government will refund the excess money out to you. You can request a tax refund from the government by filing an annual tax return. This document reports how much money you earned, expenses, and other important tax information. And it will help you to calculate how many taxes you owe, schedule tax payments, and request a refund when you have overpaid.
Common Mistakes
- Not Filing on Time! The biggest mistake people make when tax season is here is not filing on time. Studies show people wait about a week before the deadline to file their taxes, not considering any problems that might happen that could push things back, such as filling out information wrong.
- Missing or incorrect information! These mistakes, such as typos or missing numbers, can lead to your filing being delayed. Always double-check when manually entering information. Avoid math errors by using a calculator or tax preparation software that can easily formulate it for you.
- Filing the wrong tax form! It can get confusing, W2, 1040, different schedules... it's a lot of paperwork. Make sure to research which form you need to fill out based on your job type (self-employed, etc.) and status (married, single, etc.)
