Why is it necessary to pay taxes?

Every year, usually around April 15, adults of all ages express their dissatisfaction with “tax day”. This is because federal and state income tax forms are due around this time. However, have you ever wondered why it is necessary to pay taxes?

In the United States, there are governments at the local, state, and national (federal) levels. These governments consist of various branches, including legislators (who create laws), executives (who enforce laws), judges, and many others. The money received by these government workers to carry out their duties comes from taxes.

Taxes come in many forms. When you work and earn money, you are required to pay income taxes. Depending on your income, a certain percentage of your earnings is withheld from your paycheck and sent to the government.

When you make purchases at a store, you often have to pay sales tax, which is a percentage of the item’s cost charged by the store. If you own property, you are also responsible for paying property taxes based on the value of your property.

Paying taxes is not only considered a civic duty, but it is also required by law. If you fail to pay your taxes, the government agency responsible for overseeing taxes, the Internal Revenue Service (IRS), will demand payment or impose penalties such as fines or imprisonment.

The money you pay in taxes serves various purposes. In addition to funding the salaries of government workers, your tax dollars contribute to the support of common resources such as police and firefighters.

Tax money ensures the safety and maintenance of roads. It funds public libraries and parks. Taxes are also used to finance numerous government programs that assist the poor, less fortunate, and educational institutions!

Each year, when “tax day” arrives, adults of all ages must report their income to the IRS using specific tax forms. There are numerous laws that establish complex rules regarding the amount of tax owed and the types of special expenses that can be deducted to reduce the amount of taxes owed.

For the average worker, tax money is withheld from their paychecks throughout the year. On “tax day,” each worker reports their income and expenses to the IRS.

Employers also report to the IRS the amount they paid to each employee. The IRS compares all these figures to ensure that each person pays the correct amount of taxes.

If you have not had enough tax money withheld from your paychecks during the year to cover the amount of tax owed, you will have to send additional money to the government. On the other hand, if too much tax money was withheld from your paychecks, you will receive a refund from the government.

Give It a Try

Are you prepared to fulfill your tax obligations? Make sure to explore the following activities with a friend or family member:

  • Even though you don’t need to worry about paying income taxes until you have a job, there is one tax that you’re probably already familiar with: sales tax. The next time you go to the store, bring a calculator with you. While you browse through the store, take a look at the prices of the products. Use the calculator to determine the price of each product if you were to buy it. For instance, if you come across a toy truck priced at $2 and the local tax rate is 6% (six cents for every dollar), you would multiply $2.00 by 0.06 to find out the amount of sales tax you would need to pay, which is $0.12. Then, you would add $0.12 and $2 to get the total cost of the truck, which is $2.12. It’s important to remember sales tax when you start saving up for an important purchase you want to make. Always remember to calculate the cost of an item – including tax – so that you can ensure you have enough money when it’s time to go to the store!
  • Discuss with an adult friend or family member about their perspective on taxes. Do they believe they pay too much in taxes? Why or why not? What do they think their tax money should be used for? Are there any government expenditures that they consider not worth it? If so, ask for examples. What options are available to voice objections to how your tax money is spent?
  • Ask an adult friend or family member to accompany you on a walk or take you for a drive around your hometown. Bring a piece of paper and a pencil with you. As you walk or drive around, look for instances where your tax dollars are being utilized. Do you see any road repairs? Is there a public library in your town? How about the presence of police and firefighters? Try to compile a list of at least 10 examples of your tax dollars at work. You might be surprised at how much your tax dollars contribute to providing services that benefit everyone in your community!

Wonder Sources

  • http://life.familyeducation.com/taxation/money-and-kids/47969.html
  • http://en.wikipedia.org/wiki/Tax

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