What is tax? Here’s the most basic tax definition: a tax is a financial obligation that the government levies on citizens so it can fund public programs. But there are so many different types of taxes, including income taxes, property taxes, sales taxes, and many more. And, you might not be obligated to pay each one. First and foremost, you should understand that there are federal and state taxes. Federal taxes are paid to the IRS and are used to fund government initiatives including public services. On the other hand, state taxes are implemented in most states to raise funds for programs that improve the quality of life for residents. These taxes are paid to the state’s own Department of Revenue. Not only are federal and state taxes charged at different rates, but they’re filed separately. If these differences are confusing to you, you are not alone. The subtleties of different tax laws and rates can make it difficult to determine what you owe when you file your annual tax return.
Community Tax is your ultimate resource if you need help understanding taxes. Our tax professionals can answer all of your tax questions, including: “what is tax?”, “What are the different types of taxes?”, and “How do I pay each one?” Read through our helpful blogs to have taxes explained in easy-to-understand terms, so you feel more prepared when tax season arrives. Or, you can contact us today and we’ll answer any questions you still have. And, we can even handle your taxes for you.